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dvvk
Level 1

Calculate depreciation equivalent

SCENARIO: I have a vehicle that was purchased new and put into service in 2010 for our small business. The vehicle was used for business less than 100% of each year (less than 50% some years). Each year, the standard mileage rate was applied. The vehicle was then sold in 2019.

 

QUESTION: In order to determine the depreciation equivalent, do I (1) calculate the 'Rate of Depreciation Allowed in Standard Mileage Rate' for each of the ten years this vehicle was in service, (2) add these ten numbers together, and (3) subtract this new total from the total original price I purchased the car for in 2010?... Would the result I end up with be both the "Prior Depreciation Equivalent" and "AMT Prior Depreciation Equivalent" that I enter for that vehicle?

 

I assume this is the correct way, but Publication 463 confuses me a bit (especially when it begins talking about "straight line depreciation".  Any insight or clarification would be very much appreciated. 

1 Best answer

Accepted Solutions
MarilynG1
Expert Alumni

Calculate depreciation equivalent

Since you have used your Business Vehicle for over five years, it is fully Depreciated.

 

Enter $0 for Sales Price. 

 

TurboTax will ask the FMV of the vehicle when you first started using it for Business, then ask Basis for Gain/Loss and AMT Gain/Loss, which you can leave blank.

 

If you used Standard Mileage, TurboTax asks Depreciation Equivalent, where you can enter the FMV you entered earlier. 

 

You will have no Gain or Loss to report. 

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2 Replies
MarilynG1
Expert Alumni

Calculate depreciation equivalent

Since you have used your Business Vehicle for over five years, it is fully Depreciated.

 

Enter $0 for Sales Price. 

 

TurboTax will ask the FMV of the vehicle when you first started using it for Business, then ask Basis for Gain/Loss and AMT Gain/Loss, which you can leave blank.

 

If you used Standard Mileage, TurboTax asks Depreciation Equivalent, where you can enter the FMV you entered earlier. 

 

You will have no Gain or Loss to report. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

dvvk
Level 1

Calculate depreciation equivalent

Thanks so much!  Your answer really helped A LOT!

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