Independent Contractor for Uber/Lyft. During the year involved in accident and my vehicle declared a total loss. Not sure how to record this on Business Income Section?

[alan1073]

I am independent contractor for Uber/Lyft, during the year car in accident and was declared total loss. Insurance paid fair market value and gap insurance covered the difference. How do I record this in my business income and business section? I checked that I stopped using this vehicle in 2017. Not sure what to list as "Sales Price" and "Expense of Sale"? 

Do I list sales price as what Insurance paid for it? Also lists the question Expense of Sale, which I did not have any so I know to enter zero for that.

It them prompts me to enter in Vehicle Total cost which I am listing the original price I paid when I purchased the vehicle including all taxes. Is this accurate?

[viktoriyab11 · Accepted solution]

If you stop using your car for business, you can tell TurboTax that you disposed of the vehicle.

Note! You may not have to recognize a gain or loss if you dispose of the car because of a casualty, theft, or trade-in.

For a casualty or theft, a gain results when you receive insurance or other reimbursements that is more than your adjusted basis in your car. If you then spend all of the proceeds to acquire replacement property (a new car or repairs to the old car) within a specified period of time, you don’t recognize any gain. Your basis in the replacement property is its cost minus any gain that isn’t recognized. 

See Pub. 547 for more information. https://www.irs.gov/pub/irs-pdf/p547.pdf

[mousepower2015]

So my car was totaled that I bought to do Uber in I still owed on the loan the insurance company paid for less then it's worth but gap will end up paying rest so I made nothing off of it how do I fill it out

[BrittanyS]

Although your car was totaled, you received income from the insurance companies (insurance and gap).  Income received from the sale of an asset (vehicle) is not subject to self-employment tax.  However, there is also depreciation recapture to consider if the car was used and claimed on previous tax returns.

TurboTax can help you calculate the loss, gain, or depreciation recapture.  To enter a sale of a business asset in TurboTax, you can follow these steps.

1. Click Wage & Income from the left-hand side panel
2. Click Edit/Review Under Self-Employment
3. Click Review under Self-Employed Business
4. Add/Edit Vehicle and make sure to mark I stopped using this vehicle in 2022
5. Finish Interview Questions

@mousepower2015