Gifted broke down business truck 2 mechanic friend 5/2016. Purchased 4 $5000 in 8/2013. I have not entered any depreciation to date. How do I handle this?

[TaxGuyBill · Accepted solution]

Assuming you have entered it in TurboTax and have been using the Standard Mileage Rate (which includes depreciation), you just go back through the vehicle section and say that you 'converted it to personal use'.  That is all you need to do in regards to giving it away.

[knikhusky]

That's an AWESOME answer! Thank you!!

[knikhusky]

TaxGuyBill, I did that and TurboTax is indicating I need to file a "Recapture".  I've used the Standard Mileage rate while I had the truck.  Do I really need to file "recaputure"?  Not sure how to proceed.

[TaxGuyBill]

If you used the Standard Mileage Rate, there would be no "recapture" unless MAYBE if you SOLD it.  If you converted it to personal use (gave it as a Gift), there would only be "recapture" if you had used Section 179 in the year that you bought it.

Try going through the questions again, and make sure you indicated that when you 'disposed' of it, that you 'converted it to personal use'.

[knikhusky]

Ok, thanks!  I'm making this harder than it needs to be.  😉