How do I report the disposition of a business vehicle totaled in an accident?

Forum|Forum|4 years ago
October 13, 2021
5 replies
35 views

The disposition instructions for a business vehicle that was totaled say not to report the disposition on the vehicle asset sheet but to report it on the casualty theft form. The TP incurred a gain due to depreciation deductions.

After completing the business section of the casualty theft form, the full gain is considered long term. I can't find where to indicate the amount of depreciation to be taxed at the ordinary tax rate.

How do I properly report the gain so that the depreciation portion is taxed correctly?

ProSeries Professional

This topic has been closed for replies.

Camp1040

Level 10

When you arrived at adjusted basis that should take care of accumulated depreciation taxation.

D

david3Author

Level 7

Thank you for your help.

When entering the adjusted basis on Form 4684 there is nowhere to enter depreciation so the full gain is reported as long term on line 33.

I figured it out. The disposal has to be entered on the enterable 4797 p 2 and the depreciation flows to 4797 line 13 ordinary gain. If there is any additional gain then that portion flows to F 4684 line 33 long term gain.

Camp1040

Level 10

Having never filed a business casualty loss for a client and not wanting to beat a dead horse I do have a question.

By definition, adjusted basis would include original cost plus improvements, minus depreciation and Casualty losses Plus any reimbursement and the net should be casualty loss or gain.

You may be filing additional forms or taking extra steps that are needed.

Please note, this is from the point of view of a preparer not experienced with form 4684.

Sign up

Login with SSO

Let's get you signed in

Login with SSO