Truck for business

[jordieeee]

I have had a landscape company since 2019. In July 2022 we had a house fire and lost our cars (including the truck for the landscape business). When it asks me if I stopped using the truck for business I said yes and no to starting to use it for personal. When I get to the screen about sales price and expenses of sale, I put 0 for both since I did not sell it. But then the next screen it asks me for the vehicle sales cost since I didnt claim depreciation on the vehicle. What do I put here?

[Anonymous_]

You need to calculate accumulated depreciation because you should have been taking depreciation deductions each year for the truck.

[jordieeee]

This whole depreciation is new to me because in the past years I dont ever remember turbotax asking me questions about depreciation. 

[Anonymous_]

That is a problem and, considering your tax scenario, you might want to seek guidance from a local tax professional.

See https://taxexperts.naea.org/

[jordieeee]

If this is the spot, I never put anything last year then. The only thing I ever claim with the truck is using it for only business and the mileage. 

[Anonymous_]

One component of the mileage deduction is depreciation.

[jordieeee]

Then it doesnt make sense why it says "since I didnt claim depreciation" when I inputted my mileage info every year. I guess I will have to go see someone because I do not understand it. 

[PatriciaV]

It depends on how you were reporting this vehicle in the past. @Anonymous_ is correct that you may have accumulated depreciation, even if you used the standard mileage rate. If so, review this post How Do I Calculate Depreciation Equivalent? Once you have the total accumulated depreciation, you can calculate your remaining value for the vehicle, which is the "sales cost" (purchase price less depreciation).

Note that if this fire was due to a federally-declared disaster, you may be able to report a casualty loss. For more info, see What if I have property that was lost or damaged (a casualty loss)?

[jordieeee]

So basically what ever I put for mileage in 2020, I times that by .27/ 2021 mileage times by .26 ?

[leeloo]

If you used the truck in 2019, you need to include that too.

[jordieeee]

No I didnt get the truck till 2020. So with that being said once I have that number I subtract it from what I bought the truck for? I bought it for 28k so I would minus it from that? And that is my sale price? 

[jordieeee]

My depreciation is 8460 (from prior years mileage). 

My sales price and expenses of sale will be 0 since I didnt sell (correct?)

My vehicle total cost is what I paid for the truck (28k) correct?

Then on the last screen for prior depreciation equivalent thats where I put the 8460?

[ThomasM125]

Yes, the depreciation equivalent would be the business miles times the depreciation equivalent factor for each year you used it in the business, added together. The cost would be what you paid for the vehicle times the business percentage of use. For instance, if you used the vehicle 90% of the time for business, then multiply 0.90 times the cost of the vehicle to get the business cost. The sales price would be the insurance proceeds if any, otherwise it would be $0.00.

[jordieeee]

Thank you so much for this!!! 

One more question, for the sale price for what insurance paid. Do I put what they paid us after they paid the loan off? Or do I put what they paid us plus what they paid to the loan?

[jordieeee]

Also with the vehicle cost, does this include taxes and everything? Like the total of the loan after all fees and stuff?