Schedule C -- Car & Truck Expenses Worksheet : Excess basis is too large.

[jilliangen]

"Schedule C   -- Car & Truck Expenses Worksheet : Excess basis is too large." 

If anyone would be willing to explain what this means and how I can fix it, I would be grateful. I have a vehicle that I purchased in 2018. I don't recall calculating any numbers related to depreciation (I believe the software does that). My business use of the vehicle has increased this year vs. last. (Based on the questions turbotax has asked me): 

Car was purchased for 35k in 2018. It was used in 2024 for personal use about 50% of the time. 2025: I  drove approx. 7k miles, around 5k were for business. It asked me what the car was worth when I started using it for biz  in 2023 (Kelly BB estimate 23k). It has $2100 as the prior depreciation as well as prior AMT depreciation.

Then when I do the final review I get the error about "excess basis too large - 30,000" 

I would appreciate anyone willing to explain what is going on and what I need to do to fix this in simple terms. Thank you!

[DianeW777]

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions:  (Don't forget to give us the state)

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax Desktop for Windows
2. Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
   • Enter your email used for TurboTax > Enter your code > Send
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.
   • *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

We will be able to see exactly what you are seeing and we can determine what exactly is going on in your return to provide you with a resolution.

[jilliangen]

Thank you! The token number is 

1354542. The state is CA.

[jilliangen]

Also, it originally had $2100 as the "prior depreciation" and "prior AMT depreciation" defaulted. I changed it to zero to see if it would fix the problem. I am not selling the car. 

[jilliangen]

When it asks, "did you trade in a vehicle to purchase this one?" I answered yes - but that was done years ago. Are they referring to 2025? Could that be the problem?

[DianeW777]

Yes, they are referring to 2025. Let's see what happens when you answer the questions as I indicated. However you should add back the depreciation you removed.

If the car was traded it was a taxable event. It's unclear why the vehicle is still part of your tax return when you disposed of it years ago.  

At the time of the trade you likely had taxable gain because a trade has been considered as a sale in tax law since 2018. 

For now you can answer that it was disposed of (sold, traded, converted to personal use), do not enter a sales price and then select that it was converted to personal use on January 1. Be sure no depreciation is calculated on the vehicle for 2025. Select standard mileage rate (SMR) and then enter zero business miles for 2025.

If you still need assistance I will review your return once you come back to confirm.

The following information is here for that vehicle and necessary information for any active business vehicle in your business. It is the information necessary to report any taxable gain on the business portion of any vehicle used in your business. 

1. Total all of the business miles for the life of the vehicle
2. Total all miles on the vehicle for the life of the vehicle
3. Business miles divided by total miles = Business Use Percentage for the life of the vehicle
4. Take the original cost of the vehicle x the business use percentage = Business Cost
5. Take the sales or trade-in price x the business use percentage = Business Sales Price
6. Calculate the following:
   1. If you used only SMR: all of the business miles by year with the rate in the SMR for depreciation (chart below) to arrive at the total depreciation considered used by the IRS; OR
   2. Total all of the actual depreciation expense used for the traded vehicle (see that information in the Vehicle screen