Recapture

Forum|Forum|3 years ago
January 30, 2023
1 reply
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So if you convert a fully depreciated vehicle to personal use and the business is closed how would the recapture ever take place without having a business?

KrisD15

Depreciation recapture is reported as ordinary income.

It will be on your Schedule 1 line 4.

The recapture will happen when you finally sell the vehicle.

NOTE:

If you sell a business vehicle at a loss when in business, the depreciation is recaptured as ordinary (personal) income, but a business loss can also be taken on the sale.

If you switch it to personal use, and sell it later at a loss, the depreciation recapture is again ordinary income, but the loss is disallowed since it is now a personal asset.

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