Vehicle sale calculating entire sale price as gain

Forum|Forum|1 year ago
February 5, 2025
2 replies
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I used a new vehicle for a small percentage of its mileage for my rental property, so I took the standard mileage deduction. I have now sold the vehicle (traded it in) and TurboTax is calculating the entire sale price as a gain:

Business portion of purchase price 1,703

Depreciation portion of mileage 215

Adjusted Basis 1,488

Business portion of sale price 597

Loss 891

TurboTax says my gain was 597. I calculate a loss of 891. Can anyone explain this?

Thanks!

Best answer by AmeliesUncle

If the business percentage of the vehicle varied from year to year, don't enter the sale in the vehicle section (say it was converted to personal use). Then enter the manually calculated numbers in the "Sale of Business Property" section.

ThomasM125

TurboTax was not looking for the exact numbers that you entered.

TurboTax will take the purchase price you entered and multiply it by the business use percentage to arrive at the cost basis.

So, you should enter the full cost of the vehicle on the screen that asks for the basis for gain/loss. Also, any business miles entered in the current year will be factored into the prior depreciation equivalent you entered of $215 apparently, so that will further reduce the basis resulting in a larger gain on sale:

So, try it again and list the full cost of the vehicle for the basis and total and business miles driven in the current year. TurboTax will multiply the basis by the business miles/total miles, subtract the prior and current year depreciation equivalents, net that with the sales amount and that should give you the correct gain or loss on sale.

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PCFAuthor

ThomasM125, thank you very much for your help! After taking your advice and then reviewing the results in form view, I now understand the program takes the full purchase price and multiplies it by the percentage of business use to establish the basis. (It then subtracts that basis from the business portion of the sale price plus the amounts depreciated through the standard mileage deduction each year of use to arrive at the gain/loss.) My only remaining problem is that my business use percentage varied from year to year and while I used that average to arrive at the business portion of the sale price, the program used the 2024 business percentage to arrive at the basis. Now I have inconsistent percentages. Is there any way to use the overall average percentage instead as it is more accurate (and beneficial)?

AmeliesUncle

@PCF wrote:
My only remaining problem is that my business use percentage varied from year to year and while I used that average to arrive at the business portion of the sale price, the program used the 2024 business percentage to arrive at the basis. Now I have inconsistent percentages. Is there any way to use the overall average percentage instead as it is more accurate (and beneficial)?

I already answered that above.