TaxProTalk.com

Client sold auto for $12,000 in 2019 which was purchased in 2011 for $30,719. It was used 80% for business in 2011 through 2016, depreciation taken was $24,575. It was changed to 100% business use in 2018. I can't find any definite information as to how to compute the business portion of the gain since it was changed to 100% business use before being sold. If it was still used 80% for business, then the business sales price would be $9,600 (80% of $12,000) with a zero basis, so gain would also be $9,600. If I change the business use to 100% in my tax software for 2018 and 2019, it computes the business gain as $5,856 ($12,000 minus $6,144 ($30,719 - $24,575)). Can anyone tell me where I can find verification for this.

The business portion of the gain or loss from the sale of vehicle will be the ratio of cumulative business miles to cumulative total miles for the entire 9 year period vehicle was used in business. Your tax software hopefully captures that information . I use Drake software and the cumulative data is captured each year .