I place my truck in service 1/1/2020 at a bias of 23,000. I used milage deduction for 2020, 2022 and 2023 and actual depreciation for 2022. I only used my truck for business part of the time, I figure about 28% business use over those years. I plan to sell the truck this year. Please tell me if this is correct. I calculate the milage depreciation rate for 2020, 2022 and 2023, .26/.28 per mile, and add that number to the actual depreciation in 2021 and this gives me the total amount that my truck depreciated, say 7000. So the new basis on the truck is the 23,000 less the 7000 depreciation taken? When I sell it, say I make $2000 over that depreciated basis , I pay 28% of that profit in long term capital gains?
Wow complicated but I pieced this together based on other responses so am wondering if this is correct?
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When I sell it, say I make $2000 over that depreciated basis , I pay 28% of that profit in long term capital gains?
No that's wrong the $2000 income is section 1245 ordinary income recapture. the lower of the gain or depreciation taken
but if only 28% of the truck was used for work why would it be the total 2,000 that is taxed?
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