Question about reporting a sold car?

[southwestform]

I had a car that I used part time for business and I deducted mileage for when I drove it for business over the 4-yrs I owned it. I am entering info in Turbo Tax and it is asking me questions about what I sold it for. Just curious, if a car is not an asset and was not depreciated (as in my case) the car is not on my books, why does it even matter what I sold it for? Does the amount I sold it for matter to the IRS since it was not ever depreciated?

Thanks.

[mwcpa]

the mileage allowance includes an allocation for depreciation...

depreciation that is allowed or allowable reduces basis in an asset

adjusted basis is the cost less the allowed or allowable depreciation

gain is computed by taking the selling price and reducing it by the adjusted basis

[southwestform]

It is asking me what the business sales price was, and I am leaving it at 0. it then asks what I paid for the car, so I put in $28k.

it now wants to know the basis for gain/loss (enter 100% of basis) and basis for AMT gain/loss (enter 100% of basis). I am leaving both blank.

It asks for Prior Depreciation Equivalent and AMT Prior Depreciation Equivalent. I leave both blank.

It tells me that is all I need to enter since I do not have any gain or loss on the sale so there is nothing to report.

I never depreciated this car so I am very confused. Is responding the way I did wrong? Is this a bad idea?

Thank you.

[commentator]

If you used the standard mileage method to arrive at your business use auto deduction then you did deduct depreciation. There is a depreciation component in that standard rate.

Unless your business use was very large you almost certainly sold the car at a loss. Since the car, presumedly, was primarily personal use, all or almost all of that loss is not deductible.

[southwestform]

can I leave those sections blank, the ones I mentioned?

Thanks.

[commentator]

If the car was mostly personal use, leave the whole thing blank.

[southwestform]

Thanks so much for your responses!

[southwestform]

Last question there is a error that is coming up:

Depr allowed or allowable-1 is too high. For disposition calculations, depreciation cannot exceed business basis. Please see Tax Help for this field. Depr allowed or allowable = 425

1. What is the meaning of this? What is the amount of $425 for?

Thanks!

[commentator]

I guess the car wasn't mostly personal use.

What it means is that if the car is, for example 60% business use, then the total depreciation deduction over the years cannot exceed 60% of the cost of the car.

[southwestform]

The car was absolutely mostly personal use. I only at most used it for business 10% of the miles driven. I guess there must be some value I'm unaware of entered that is causing this problem.

"What it means is that if the car is, for example 60% business use, then the total depreciation deduction over the years cannot exceed 60% of the cost of the car."

Any suggestions on what I might be able to do to fix this, short of finding professional help tomorrow? I have only entered miles to be deducted over the past few years and Turbo Tax did the rest, including depreciating it apparently.

Thank you!

[commentator]

Suggestions? See my reply #5 above.