A vehicle was purchased by an s corp, but due to the nature of the business, it is not used 100% for business (i.e. it is available for personal use by the business owner). We've indicated in Lacerte that it is 80% business use, thus limiting the amount of depreciation can be taken.
When the asset has been fully depreciated, it will still have a book basis = 20% of the cost since that is the personal use portion, and the portion that cannot be depreciated. Book depreciation = federal tax depreciation in this instance.
Once the asset is sold by the business, for tax purposes, is the gain/loss based on the 80% business use (i.e. 80% of full cost less any A/D to date), or is the 20% personal use included in basis such that when fully depreciated, its NBV for tax will be fixed at 20% of original cost?
In other words, if the asset is disposed of for $0 after it has been fully depreciated, is the loss for tax purposes $0 or 20% of the original cost?