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posted May 31, 2019 6:13:24 PM

Why do you show a gain of $920 when I bought the car for about $10,000 and sold it for $1,500?

What details do you want to know?  I had the car for 14 years.

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1 Best answer
Level 9
May 31, 2019 6:13:27 PM

As Critter mentioned, any depreciation lowers your "Basis" (cost).  So it seems like over 14 years, you have claimed $9420 of depreciation, which lowers your Basis (cost) to $580.   Selling it for $1500 gives you a $920 gain.

*** Those numbers assume the vehicle is 100% business usage.  ***


If it was less than 100% business usage, the calculation are more complex *AND* TurboTax usually can not automatically calculate the proper gain/loss.  You would need to do the calculations manually or go to a tax professional.

As the previous paragraph indicates, if the business percentage varied since the car was first "placed in service", you need to do the calculations manually or go to a tax professional.


4 Replies
Level 15
May 31, 2019 6:13:26 PM

It is the depreciation recapture ... review the form 4797.

Level 9
May 31, 2019 6:13:27 PM

As Critter mentioned, any depreciation lowers your "Basis" (cost).  So it seems like over 14 years, you have claimed $9420 of depreciation, which lowers your Basis (cost) to $580.   Selling it for $1500 gives you a $920 gain.

*** Those numbers assume the vehicle is 100% business usage.  ***


If it was less than 100% business usage, the calculation are more complex *AND* TurboTax usually can not automatically calculate the proper gain/loss.  You would need to do the calculations manually or go to a tax professional.

As the previous paragraph indicates, if the business percentage varied since the car was first "placed in service", you need to do the calculations manually or go to a tax professional.


Level 15
May 31, 2019 6:13:29 PM

It doesn't have to have been 100% business use.  The standard mileage rate includes 22-24 cents per mile as a depreciation allowance.  If the car was driven for around 40,000 miles of business or work use, using the standard mileage rate, that would account for $9420 in depreciation.  

If you think you can calculate a depreciation figure that is more accurate than turbotax, you would have to change to the desktop program in order to make a manual correction on the form.

Level 9
May 31, 2019 6:13:29 PM

My specific numbers were based on 100% business usage.  If it is reporting a gain of $920 with a business percentage of less than 100%, my numbers would be altered because TurboTax applies the CURRENT year business percentage to the sale.