Sch C - Uses personal Vehcile >50% - Claimed Std Mileage Only

[dude7707]

Rec'd following:

2017 - Busn % - $3,420 Legal Settlement - Shop Repairs - Offset against repairs?

2018 - Sold Vehicle - Busn % Proceeds - $1,315 - Taxable or Not Taxable?

Additional facts:

Gross Proceeds			2,000
Times Business %:		66%		Used 2018 Busn Mileage %
Adjusted Gross Proceeds		1,315
Less:  Adjusted Cost Basis
Original Cost Basis -	14,000
Times Business %:		66%
Adjusted Basis			9,208
Less:  Depreciation Component		5,291
Adjusted Cost Basis		3,917
2018 Estimated Gain(Loss)		(2,601)

I would say, Not Reportable, since generally, personal asset cannot report losses, not a Corp asset, and even though depreciation was taken, since there is a depreciation component in the standard mileage rate.

[sjrcpa]

There is depreciation in the standard mileage rate.

There may be a gain on the business portion. Or not.

[sjrcpa]

With your additional info I agree there is no taxable gain.

But how did cost basis in 2017 go from $12,000 to FMV of $2,000 in 2018? Was the vehicle trashed? Or was the 2017 basis used original cost and not lower of cost or market when placed in service for business use?

[dude7707]

I'm sorry, you mean $14k Original cost basis, since this is what I had for 2017, and given limited documents and now working with unfortunately 75 yr old dementia T/P.  As you can see, adjusted the Orignal Basis by the Busn. % based on 2018 Mileage to $9,208.  This vehicle was a 1988 Bronco and believed it was placed in service when purchased in 2012 or earlier and they were just taking std mileage.....As for the decline in FMV in 2018.....I would say, as a result of taking the vehicle to the shop in 2107, and not having it returned in a workable condition......it probably was trashed and just parted out the engine and other usable parts in 2018...considering its age.

[George4Tacks · Accepted solution]

I will once again put in a plug for Tax Tools One of the tools helps to handle this. Vehicle 
Trade-In - Standard Mileage Rate shows the depreciation rate per mile for each year. Here is a worksheet that might help you reconcile your numbers.

[dude7707]

Thanks George for this schedule...have used Tax Tools in the past....and it is great.

Tied out the depreciation component - $5,291 using your schedule.