Business asset repossessed

Retirement minded client takes his fully depreciated business vehicle out of service, finds a buyer and sells the asset for $85,000 in December 2019. He reported the $85,000 of depreciation recapture gain on his 2019 tax return. He structured the deal with a down payment of $15,000, monthly payments of $1,000 and a lien on the vehicle. It did not qualify for the installment sale method. He received $9,000 in payments from the buyer until the buyer contracted the Covid 19 virus and passed away in 2020. Client is in the process of repossessing the vehicle and will attempt to sell it again.

Since this was a former business asset, what will the tax characteristics of the repossessed vehicle be? The client has no intention of returning to the workforce and use this vehicle.
The balance of the loan is $61,000. Would this amount become the new basis for a subsequent sale? Client tells me that he would likely be able to sell it in the range of $45,000 to $50,000. It is unlikely that he can sell it now for $61,000. How would a possible loss be reported for 2021?

I don't see how the outstanding loan balance could give the taxpayer basis. Any repossession costs would increase his basis. Since the vehicle was already fully depreciated any costs above repossession costs will be ordinary income.

I don't see how the outstanding loan balance could give the taxpayer basis. Any repossession costs would increase his basis. Since the vehicle was already fully depreciated any costs above repossession costs will be ordinary income.

I think you're ignoring the recapture on which tax was already paid before the first sale.

To OP, because the taxpayer pulled the asset out of their business before selling it, there's an argument to say this was a personal asset prior to the first sale. To follow that line of thinking, any loss is personal.
However, because of the close timing of the sale after it was taken out of service for business purposes, there is an argument to have it remain a business asset. In that case, the loss would be a 1231 loss.

Yes, I was. Thank you Captain.