Question

Schedule c, Business Vehicles

Forum|Forum|5 years ago
March 7, 2021
1 reply
0 views

In 2019 I listed a 2006 Chevy Silverado as 100% business use. This vehicle was destroyed by fire so in 2020 I checked the box stating that I took the vehicle out of service. My Taxes Owed went up by about $1,800. What is the reason for this? The old truck had only $28.00 depreciation left.

TurboTax Home & Biz Windows

J

JeffreyR77

You need to ensure the 2006 Silverado is written off as having received zero dollars upon disposition.

Simply taking it out of service may be recapturing some depreciation causing you to have a balance due generated.

Typically when a vehicle is disposed of after being fully depreciated the amount depreciated gets added back to basis in determining if there is a taxable gain or loss on disposition.

In your case, there wasn't a trade or sale, it was destroyed.

Go through the asset summary for the Silverado and ensure it is written off as disposed of, not just removed from service.