Sale of Business Truck and Depreciation Equivalent

Forum|Forum|1 year ago
February 4, 2025
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Purchased a truck for 100% business use in 2016 for $10,000. Have taken actual mileage deductions each year. In early 2024, we sold the truck for $11,000 (yes, more than we paid for it). I entered these values and got the gain of $1k in TurboTax. Thought I was good until the program is asking me for "Depreciation Equivalent". Since I'm pretty sure we've claimed over the $10k or $11k in mileage in the last 8 years, which value do I enter for this field? And is it the same for Regular and AMT or split between them?

TurboTax Home & Biz Windows

JamesG1

Depreciation equivalent is the portion of the standard mileage rate which the IRS considers the equivalent of depreciation expense.

You must reduce your basis in your truck (but not below zero) by the amount of this depreciation.

The computation is below but, as old as your truck is, you may have exceeded the original cost of $10,000 in 2016.

If this is the case, Prior Depreciation and AMT Prior Depreciation would equal $10,000.

IRS Publication 463, page 35 states:

If you used the standard mileage rate for the business use of your car, depreciation was included in that rate. ..... You must reduce your basis in your car (but not below zero) by the amount of this depreciation.

Multiple the miles you claimed for each year times the rate for each year listed in the chart below.

2023 10,000 @ $.28 = $2,800

2022 10,000 @ $.26 = $2,600

2021 10,000 @ $.26 = $2,600

Total depreciation equivalent = $8,000