TaxGuyBill
Level 15
12-07-2019
01:09 AM
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This is what I would do:
- Enter disposition date on Asset Entry Worksheet. Do NOT enter any sales information.
- Calculate total actual depreciation taken for all years. That may include the built-in amount if the Standard Mileage Rate was used, or the actual amount of depreciation if the Actual Expenses were used (don't forget to include the current year).
- Calculate the average business percentage (combined business miles for all years divided by combined all miles for all years).
- Original cost multiplied by average business percentage equals Unadjusted Business Basis.
- Total sales price multiplied by the average business percentage equals Business Sales Price.
- Open the "Enterable 4797" and enter the Unadjusted Business Basis (#4 above), the amount of business depreciation (#2 above), and the Business Sales Price.
I would not enter anything on Form 8949/Schedule D because the personal loss is not deductible (and it is extremely unlikely the personal portion was sold at a gain).
The fact it was a Luxury vehicle does not matter for purposes of the sale.
Yes, enter the full purchase price for the new vehicle as a new vehicle on the Car/Truck worksheet.
