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Level 2

Question

Depreciation Recapture

Forum|Forum|2 years ago
March 28, 2024
2 replies
20 views

We gave away our work truck last year. I'm a little confused on how to report it. I understand that this is considered converting the asset to nonbusiness use. We did not depreciate the truck over the years, but we did claim deductions for mileage. Will I need to fill out the recapture form?

Level 15

No, if you gave the truck away, the person you gave the truck to may need to claim the depreciation recapture when they sell the truck.

You need to add the "Depreciation Equivalent" from the standard mileage you used.

Standard Mileage has a portion of depreciation built into the rate each year.

For 2023 it was .28/mile

2022 and 2021 .26/mile

2020 .27/mile

Add the "Depreciation Equivalent" and give that number to the person you gave the truck to.

Their basis is your adjusted basis (cost plus improvements less depreciation)

Standard Mileage Rates

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Level 2

Ok, thank you.