When a business vehicle business use fluctuates, TurboTax cannot compute the capital gain on the sale.
Business use was always around 49%. The fluctuation was always 49 point something due to business miles versus personal miles driven.
What was the basis you reported when you entered the vehicle?
It is assumed the vehicle was fully depreciated if it was used for 18 years, so how do you/TurboTax come up with 7457 depreciation allowed? Did the business use ever drop to under 50%?
Do you have the asset depreciation worksheet (it should be included with your documents)?
I looked on the Tax Year 2023 Form 4562 (Depreciation/Amortization Report) for the figures you mentioned above. The reported basis was 34,562. Business use 49.78%. Life 5.0. Method/Convention ALT/HY. Prior depreciation $5589. Current depreciation $933. The $7457 was what Turbo Tax showed for the 2024 taxes as depreciation taken thus far.
The 8,000 trade in would be considered 4,000 business sale if this was used 50%
I used the ~$4000 as the business part of the sale.
You say 23,669 LOSS, so why would the program expect Self-Employment tax on a loss?
The $23,669 loss offset my business income AFTER it showed on Schedule C that I had a profit of $23,669. So that sparked self-employment tax. I had enough carryover in my home office to cover that but Turbo Tax limited it because of the $23,669 loss.
Which TurboTax program are you using and Online or Desktop?
I'm using the Desktop version (was downloaded though with a code from the software that I bought at Sam's Club...apparently, Turbo Tax doesn't produce the disks anymore). I'm using Turbo Tax Home & Business.
Basically, when a business vehicle is sold, you need to figure the adjusted basis.
The adjusted basis is the basis you reported when you entered the asset less the deprecation taken (or should have been taken)
If you are showing nonrecaptured net section 1231 losses, that says to me that the program is showing a loss on the "4,000" sale, but if it was fully depreciated over 18 years, I don't see how that is possible. (and I don't see how it is possible that the business portion was not fully depreciated after 18 years of use)
That's another portion of this that has me stumped. So does this mean that the nonrecaptured net section 1231 loss will have to be claimed as income on my 2025 taxes on top of my income for the year? Can I not use a loss? Looks like it'll just end up costing me a ton of money. which I don't have.
With my tentative plans of retiring in 5 years, should I just not add my new SUV to the business? If 18 years was not enough to fully depreciate the old SUV, it surely would not fully depreciate this new one.
I TRULY appreciate you responding to my plea! I know this is the 11th hour before the taxes are due. I appreciate you helping me!!!!!
