rental property - disposition of vehicle

Forum|Forum|1 year ago
April 7, 2024
1 reply
0 views

I use a personal vehicle for our rental properties. I don't write off the purchase of the vehicle to any of our rental properties. I only write off the mileage driven that are specific to the rental properties. In 2023 we sold the vehicle and replaced it with a different one. Since I didn't list the vehicle as an asset thus never depreciating it, can I leave the purchase price and the sales price blank?

TurboTax Home & Biz Windows

Best answer by DianeW777

No. You have a taxable event for the vehicle sold because the standard mileage rate (SMR) has a depreciation component.

Total all of the business miles for the life of the vehicle
Total all miles on the vehicle for the life of the vehicle
Business miles divided by total miles = Business Use Percentage for the life of the vehicle
Take the original cost of the vehicle x the business use percentage = Business Cost
Take the sales or trade-in price x the business use percentage = Business Sales Price
Calculate all of the business miles by year with the rate in the SMR for depreciation (chart attached) to arrive at the total depreciation considered used by the IRS.

Next enter your Sale of Business Property

Wages & Income at the top
Scroll down to Other Business Situations
Select Sale of Business Property
Select Sales of business or rental property that you haven't already reported.
Answer 'Yes' to Do all of the following apply...?
Enter your sales information, do not make an entry for depreciation (no zeros)
1. Description of the Property (Second Home/Previous Rental Home)
2. Sales Price/Sales Expenses
3. Date acquired and date sold
4. Sales Price
5. Cost
6. Depreciation

DianeW777Answer

No. You have a taxable event for the vehicle sold because the standard mileage rate (SMR) has a depreciation component.

Total all of the business miles for the life of the vehicle
Total all miles on the vehicle for the life of the vehicle
Business miles divided by total miles = Business Use Percentage for the life of the vehicle
Take the original cost of the vehicle x the business use percentage = Business Cost
Take the sales or trade-in price x the business use percentage = Business Sales Price
Calculate all of the business miles by year with the rate in the SMR for depreciation (chart attached) to arrive at the total depreciation considered used by the IRS.

Next enter your Sale of Business Property

Wages & Income at the top
Scroll down to Other Business Situations
Select Sale of Business Property
Select Sales of business or rental property that you haven't already reported.
Answer 'Yes' to Do all of the following apply...?
Enter your sales information, do not make an entry for depreciation (no zeros)
1. Description of the Property (Second Home/Previous Rental Home)
2. Sales Price/Sales Expenses
3. Date acquired and date sold
4. Sales Price
5. Cost
6. Depreciation

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

coloradokatAuthor

thank you so much for this. does this apply to any percentage of business use? I was reading somewhere that it only applied to 50% or more business use of a vehicle and my business use is only at 31%.