# Selling a car used 100% for Uber



## LAuberX (Jun 3, 2014)

On my first attempt at our 2016 taxes I said I sold my previous Uber car. Big mistake.

Turbo Tax wanted me to enter .22 per business mile for 2014 and .24 per business mile for 2015 so the IRS could recoup that money on the sale of a business use asset... even though I did not depreciate that asset (my car). 2014 35,000 miles $7,700, 2015 37,500 miles $9,000 in "recoup" value.

Using the formula provided I would have added $16,700 to my taxable income! in other words if you sell your car for a decent price the gubment wants a cut!

So for now doing my return is on hold... what is the work around?

Tax pros?


----------



## I_Like_Spam (May 10, 2015)

If you took the 54 cents or the standard federal mileage rate, that 54 cent rate includes an amount for depreciation.

So you did actually depreciate the car, even though you didn't consult depreciation/amortization tables.

Since you sold the car, they are identifying a capital gain here.


----------



## LAuberX (Jun 3, 2014)

I understand what they are trying to do.... just trying to minimize the pain!


----------



## Older Chauffeur (Oct 16, 2014)

LAuberX said:


> I understand what they are trying to do.... just trying to minimize the pain!


Bummer! I know they have asked each time I have changed vehicles whether I sold or traded the old one. But since mine have all been used mainly for personal rather than business purposes, I haven't noticed any impact on my taxes.

In case you haven't seen it, here's an explanation and a table showing the per mile rate by year.
I know you ask for tax pros, which I am not. I hope UberTaxPro will respond with help for you.

*Depreciation adjustment when you used the standard mileage rate.* If you used the standard mileage rate for the business use of your car, depreciation was included in that rate. The rate of depreciation that was allowed in the standard mileage rate is shown in the _Rate of Depreciation Allowed in Standard Mileage Rate_ table, later. You must reduce your basis in your car (but not below zero) by the amount of this depreciation.

If your basis is reduced to zero (but not below zero) through the use of the standard mileage rate, and you continue to use your car for business, no adjustment (reduction) to the standard mileage rate is necessary. Use the full standard mileage rate (54 cents per mile for 2016) for business miles driven.









These rates don't apply for any year in which the actual expenses method was used.

*Rate of Depreciation Allowed in Standard Mileage Rate*

*Year(s)* *Depreciation* 
*Rate per Mile* 
2015-2016 $0.24 
2014 0.22 
2012-2013 0.23 
2011 0.22 
2010 0.23 
2008-2009 0.21 
2007 0.19 
2005-2006 0.17 
2003-2004 0.16 
2001-2002 0.15 
2000 0.14

*Example.*

In 2011, you bought a car for exclusive use in your business. The car cost $22,500. From 2011 through 2016, you used the standard mileage rate to figure your car expense deduction. You drove your car 14,100 miles in 2011, 16,300 miles in 2012, 15,600 miles in 2013, 16,700 miles in 2014, 15,100 miles in 2015, and 14,900 miles in 2016. The depreciation portion of your car expense deduction is figured as follows.

*Year* *Miles x Rate* *Depreciation*
2011 14,100 × $0.22 $3,102
2012 16,300 × 0.23 3,749
2013 15,600 × 0.23 3,588
2014 16,700 × 0.22 3,674
2015 15,100 × 0.24 3,624
2016 14,900 × 0.24 3,576
*Total depreciation* *$21,313*
At the end of 2016, your adjusted basis in the car is $1,187 ($22,500 − $21,313).

*Depreciation deduction for the year of disposition.* If you deduct actual car expenses and you dispose of your car before the end of its recovery period, you are allowed a reduced depreciation deduction for the year of disposition.

To figure the reduced depreciation deduction for a car disposed of in 2016, first determine the depreciation deduction for the full year using Table 4-1.

If you used a _Date Placed in Service _line for _Jan. 1-Sept. 30, _you can deduct one-half of the depreciation amount figured for the full year. Figure your depreciation deduction for the full year using the rules explained in this chapter and deduct 50% of that amount with your other actual car expenses.

If you used a _Date Placed in Service _line for _Oct. 1-Dec. 31, _you can deduct a percentage of the depreciation amount figured for the full year. The percentage you use is determined by the month you disposed of the car. Figure your depreciation deduction for the full year using the rules explained in this chapter and multiply the result by the percentage from the following table for the month that you disposed of the car.
*Month* *Percentage*
Jan., Feb., March 12.5%
April, May, June 37.5%
July, Aug., Sept. 62.5%
Oct., Nov., Dec. 87.5%


----------



## SEAL Team 5 (Dec 19, 2015)

I_Like_Spam said:


> If you took the 54 cents or the standard federal mileage rate, that 54 cent rate includes an amount for depreciation.
> 
> So you did actually depreciate the car, even though you didn't consult depreciation/amortization tables.
> 
> Since you sold the car, they are identifying a capital gain here.


Exactly


----------



## UberTaxPro (Oct 3, 2014)

LAuberX said:


> On my first attempt at our 2016 taxes I said I sold my previous Uber car. Big mistake.
> 
> Turbo Tax wanted me to enter .22 per business mile for 2014 and .24 per business mile for 2015 so the IRS could recoup that money on the sale of a business use asset... even though I did not depreciate that asset (my car). 2014 35,000 miles 7,700. 2015 37,500 miles $9,000.
> 
> ...


Did you enter your basis in the vehicle? Did you enter your purchase price in the formula somewhere? By the way the same thing happens when you sell your house that you've taken a home office deduction on.


----------



## LAuberX (Jun 3, 2014)

I did when it asked me. It asked for cost basis, I plugged it in. Then it asked for selling price and to calculate the past years depreciation I'd taken. That's when it told me the bad news...

Then I deleted that "practice" return until I could do some research! That was the only way to delete that form/ schedule about selling the asset in TurboTax.


----------

