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TaxesABC123
April 12, 2023
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Depr allowed or allowable is too large - We haven't sold the car

  • April 12, 2023
  • 1 reply
  • 0 views

My husband was using the same car for business in 2020 and 2021. He was also using it in 2022 but it broke down around September. He immediately bought another car since he needed it for work. However, the old car is still parked where it broke down because he can't use it but he is still insisting that he will sell it (someday). In this case, what should I do to fix the "depr allowed or allowable is too large"?

 

Thanks in advance!

Best answer by mglauner

In the Vehicle Asset section, you can indicate that the vehicle was 'converted to 100% personal use' with a date.  Save the Form 4562 with the amount of Prior Depreciation Taken, in case he does sell the car in the future.   At that time, he would report it as a 'Sale of Business Property'.  

 

Don't enter a Depreciation amount that is larger than the remaining basis in the Vehicle (original Cost Basis entered, less Depreciation Taken). 

 

Then you can add the new Business Vehicle.

 

@TaxesABC123 

1 reply

M
mglaunerAnswer
April 12, 2023

In the Vehicle Asset section, you can indicate that the vehicle was 'converted to 100% personal use' with a date.  Save the Form 4562 with the amount of Prior Depreciation Taken, in case he does sell the car in the future.   At that time, he would report it as a 'Sale of Business Property'.  

 

Don't enter a Depreciation amount that is larger than the remaining basis in the Vehicle (original Cost Basis entered, less Depreciation Taken). 

 

Then you can add the new Business Vehicle.

 

@TaxesABC123 

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