Recapture - Form 4797 Line 34 Too Small

[tigertas32]

I have a business recapture that I am trying to figure out.

I took the special depreciation in October 2023 and decided that starting 2025, I will no longer use my vehicle for business purposes and just recapture the depreciation.

TurboTax walks me through the questions and then says I need to do the recapture.  So, I fill in the amounts and then in the review it tells me the numbers are too small.  It says to recapture at Straight line depreciation.

Can someone help do the math for me?  Or where am I going wrong?  Let me know what info you need and I'll be happy to tell you.

[tigertas32]

Ok.  Maybe this will help some people.

In October 2023 I purchased a vehicle costing $60000.  Used it for business 75% of the time.  I used the special depreciation, and at that time it was 80%.  So the math is:

60000*.75*.8=36000

This is what I am putting in From 4797 Line 33.

For line 34, it asks me to use Straight Line.  So now the math is:

60000*.75=45000   and because it was October, I use the MQ method and have 2.5% for year 2023, and 20% for year 2024.  I discontinued use 1/1/2025.

.025*45000=1125

.2*45000=9000

Total = 10125

So the difference is now added onto my income - 45000-10125=34875

The problem I am getting is that in review, it tells me that my form 4797 line 34 is too small which says 10125.

Am I missing something?

[DianeW777]

If I understand your math the first year you used 80% Special Depreciation on the business use percentage of your vehicle. If we assume that was the business use percentage in each year your formula is correct however the recapture if the difference between what you did take and what would have been allowed using straight line (instead of special depreciation accelerated rate).

• $10,125 -- Allowed under Straight Line
• $36,000 -- Special Bonus Depreciation (80%) 
• $25,875 -- Recapture

Try using this information to accurately reflect the total recapture amount.

@tigertas32 

[tigertas32]

@DianeW777 

Yes, that was my math.  But in form 4797, it specifically says in line 34 the Recomputed Depreciation which is 10125 and then line 35 is the Recapture amount which then gets reported as income.

See screenshot.

[DianeW777]

There would likely be more depreciation after 2023 depending on whether the business use percentage changed (most common since mileage is the key). If not, and you believe you have accounted for all depreciation in your calculations, then you should edit the 4797 in forms to the correct recapture.

You may be required to mail your tax return.

@tigertas32 

[tigertas32]

Why doesn't turbotax help with figuring out what this depreciation is from other years?  The help section says it will help with the calculation, and then it says I have to do it manually.  Seems pretty misleading.

@DianeW777 

[tigertas32]

@DianeW777 Then why would I have to mail in my return?

[DianeW777]

TurboTax requires your eyes and input on this because it involves history that may not have been input yet or carried over perfectly from prior years. You have a good understanding about the recapture requirements needed for your return.

We at Intuit TurboTax want our users to be completely delighted with their experience using our products and services, and successful in their financial lives and businesses.

Once you file your return, as long as the settings to receive communication from Intuit don’t block it, you will see a pop-up message or receive an email with a survey asking you about your experience. We encourage you to leave your notes and comments there. “Voice of the Customer” notes and comments are read and acted upon. 

If you are using TurboTax Desktop, you can also leave feedback at the Final Steps tab.

[user17530686294]

How about you guys fix the **bleep** form to allow for the compute amounts if the worksheets don't automatically compute things.

I'm having similar problems and it's very frustrating because other tax software allows for the line 34b to be correctly filled, but now I have to move my entire workflow to another tax software just because of this one minor issue.