FORM 4797 Sale of vehicle on which standard deduction was used

[Greta]

I have calculated the depreciation portion of the standard mileage deduction. The sale still produced a loss. But where on Form 4797 do I enter the transaction. I see only the form if there is a Gain. But where do I put it if there is a loss?

[jeffmcpa2010 · Accepted solution]

You don't.

When you are using the std. mileage rate, purchase and sale transactions with the vehicle are irrelevant, and are not reported on the tax return.

[TaxGuyBill]

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@jeffmcpa2010 wrote:

You don't.

When you are using the std. mileage rate, purchase and sale transactions with the vehicle are irrelevant, and are not reported on the tax return.

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Huh?  Sorry, but that is completely wrong.

@Greta  Is this a vehicle that varied in business percentage (therefore the Asset Entry Worksheet will give funky number if you enter the sale on the worksheet)?

[jeffmcpa2010]

Huh?  Sorry, but that is completely wrong.

Bill, Mind explaining how you think that is wrong?

If you are using the Standard Mileage Rate to cover all vehicle expenses to claim some business usage of a personal vehicle, does not change the character of the vehicle from personal, and you are not allowed to claim losses on the sale of personal assets.

I (possibly incorrectly)made the presumption that the usage is in a personal business, Schedule C, E or F, since Corporations and Partnerships may not use the standard mileage rate to compute the vehicle expenses for company-owned vehicles.

[TaxGuyBill]

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@jeffmcpa2010 wrote:

Huh?  Sorry, but that is completely wrong.

does not change the character of the vehicle from personal,

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It most certainly DOES change the character.  It is now a partial business asset, just like if you used Actual Expenses, or for any other asset used for both personal and business use. Why would you think that using the Standard Mileage Rate makes it a non-business item?

The Standard Mileage Rate has a depreciation component built-in to it to adjust the Basis of the business portion of the asset.

[Greta]

The (heavy) vehicle was actually used 100% for business, though not enormous mileage. I calculated the depreciation portion since its purchase in 2014. I came up with a 4K loss. But I didn't know where and how to report it in Form 4797. I only found the 4797 worksheet to report a gain.

[TaxGuyBill]

Why aren't you using the disposition section of the vehicle worksheet?

[Greta]

I never had an asset entry for the vehicle because I used standard mileage rather than depreciation plus actual expenses. I don't really know what the vehicle disposition section is, I've never used it.

[TaxGuyBill]

It never occurred to me to NOT use the vehicle worksheet.  😂

In answer to your question, you can enter the information on page 1 of Form 4797.  Right above line 1 there is a table that you can enter the information for the sale. 

However, you are better off using the vehicle worksheet.  The usual usage reports the deduction for the Standard Mileage Rate, enters the vehicle information on the bottom of Schedule C/Form 4562 and can report the sale.  But the reporting of the sale can ALSO properly impact the QBI calculation and/or line 8 of 8829, so if you don't use the vehicle worksheet you would need to manually figure out those other things.

[Greta]

How do I find the vehicle worksheet?

[TaxGuyBill]

Is this a Schedule C?  If so, there are several "Quickzoom" buttons between lines 7 and 8 of the Schedule C worksheet.  The vehicle one is the third one.