Hi and welcome to Just Answer!When you dispose the asset which was used for your business - the sale transaction should be reported on form 4797 - and you might need to recapture depreciation.While you did not deduct specifically depreciation - it is included into your mileage rate deduction.Because you deducted your transportation expenses based on the standard mileage rate in previous years - you need to adjust your basis on that car.Specifically - see page 26 in this publication - http://www.irs.gov/pub/irs-pdf/p463.pdf Disposition of a Car - in the middle column - depreciation rates per mile in previous years.Use these rates to adjust your basis.
OK, I see the publication, but how would I use that with TurboTax? TT askes the questions and I never saw a reference to the stuff in the publication. Also, I read in the pub a "like kind exchange." I didnt "trade it in" at the dealership, I sold it outright, but the newer car was a replacement for the older one, so that would be the same thing, wouldnt it? How do I do all this in Turbo Tax?
"like kind exchange" doesn't relate to your situation.However - the sale transaction should be reported and you might have a gain that should be recaptured.The first step is to determine your basis - that is your original purchase price PLUS any improvements MINUS depreciation based on rates per mile in previous years.Then - your gain = (sale price) - (adjusted basis).If you have a gain - it must be recaptured up to the amount of depreciation.The sale transaction is reported on form 4797 - that you need to locate in the Turbo Tax.
Going to work now. Will be back later tonight. But please enter a reply my last entry and Ill pick it up from there tonight
Please take your time. Let me know if you need any help with reporting.
Repairs just keep your property in good working condition but do not add to the value of the property.An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use.Betterments. Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property.Restoration. Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition.Adaptation. Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property.
OK. I bought it for 1000 in 2011, June 10th. I continually replaced work/defective parts. Replaced A/C/ compressor, alternator, brakes, etc. That wouldnt be a betterment I suppose. I sold it for 1200 in December 2012. Bought it with 175020 miles and sold it with 226935. 50449 of those were business miles, 23030 in 2011 and 27419 in 2012. What do I do with this information now?
Why is the adjusted basis zero. I put a ton of miles on the car, doesnt it depreciate?
ok, so what do i do now in TurboTax? In business expense on "business vehicle expense", it has me edit for this car since I stopped using it in 2012. There is a place called "Trade in link" and TT thinks this was for a trade in, which it was not, i sold it outright. I was told by a previous Just Answer expert that I needed to enter stuff in teh trade in areas as I replaced this vehicle with another one. It has a place to edit on teh form 8824. How can I fix this ? Going to bed now will be back in the morning
What do I do with this info in Turbo Tax? Turbo tax keeps telling me this was associated with a trade in and theres so box to say if it was or was not. I DO see where on teh new vehicle if it was bought with a trade in and I say No it was not, but TurboTax keeps saying it is.
I dont recall TT ever asking if I disposed of the car, it only asked if I BOUGHT it as part of a trade in. Never seemed to care if I disposed of it. Perhaps I should delete the car then reenter it ?
OK, but what do I do with whats entered already? TT thinks it was traded in and there was no place to say otherwise anyway. So what do I do with the info you sent me? Should I delete that car from my return and then reenter it?
should I delete and reenter both cars? I deleted the sold car and am reentering it. A section askes if I own car, lease car, no it isnt mine. Since its sold do I say it isnt mine or say own it since I owned it during 2012 and used it for biz
TT is asking me right off the bat do i own the car, do i lease the car, or "the car isnt mine." TT does not know I sold is, so do I say I own it even though I sold it?