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My client had a vehicle that was sold in 2019, the vehicle was used part time for business. In the 2016, 17, 18 and 19 tax years, the standard mileage deduction was taken. The sale of the car has generated a loss. What screen in Lacerte is used to reflect the loss?
Thanks for any help.
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Are you sure there is a loss? The standard mileage rate contains a depreciation component. The business use gain or loss is reported on Form 4797. You can enter the disposition information in the depreciation screen where you have the car.
The more I know the more I don’t know.
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When you show the sale, be sure to apply an appropriate percentage of business use for ALL YEARS. e.g. 60,000 miles and 15,000 business miles over 4 years gives a 25%business use. Sale price = 25% of total, Basis = 25% of original cost less the depreciation portion of standard mileage rate.
Personally, I don't think I would go there, but if you do make sure you charge appropriately for the time involved to get it right.
Answers are easy. Questions are hard!
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Thank you for your responses, I appreciate it. Here is more information about what I am trying to achieve. The car was purchased in 2016 as a used car for $25164 and used part time for business. It was sold in 2019 for $6500. The depreciation schedule is as follows:
Year Total Miles Total Business Miles Depreciation rate Deemed or Actual Depreciation
2019 1276 1144 .26 297
2018 8204 2284 .25 571
2017 9683 3486 .25 872
2016 9787 3250 .24 780
The business percentage was 35% which resulted in
Sales Price $2,282
Original Basis $8,835
Less depreciation $2,520
Adjusted business basis $6,315
Loss -$4,033
I am looking for the screen to put the loss of -$4,033 unless I am missing something here.
Thanks
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Thank you for the information - I will look at Form 4797.