Business use to personal use vehicle conversion in ProConnect?

[C_A]

How can I indicate in ProConnect that a Sole Proprietor has converted his vehicle (85% business use with no 179 or special depreciation taken) to personal use and not trigger a loss? If I enter a date of disposition the program calculates a huge loss.

[George4Tacks · Accepted solution]

Did you ONLY enter Date Sold?

DO NOT INPUT anything into any other input areas below that Date Sold. 

[TaxGuyBill]

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@C_A wrote:

 (85% business use with no 179 or special depreciation taken) to personal use

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This isn't part of your question, but was any accelerated depreciation taken (such as 200%DB)?  Or was only Straight Line or the Standard Mileage Rate used?  Any form of accelerated depreciation may need to be recaptured if the Recovery Period is not over.

[C_A]

200%DB was used. I was under the assumption that the difference between 200%DB and SL would only be recaptured if/when the vehicle was sold? 

[C_A]

Thank you. That did take care of the loss issue, but ProConnect is still trying to grant depreciation expense on a vehicle that was converted on the first of the year. 

[TaxGuyBill]

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@C_A wrote:

200%DB was used. I was under the assumption that the difference between 200%DB and SL would only be recaptured if/when the vehicle was sold? 

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No.  A vehicle is Listed Property, so there is recapture of the accelerated portion (the difference between the actual accelerated amount and the amount if it had been Straight Line) when the business percentage drops to 50% or less.

If you entered the disposition date of 1/1/23, you are saying it was used for one day in 2023, so depreciation would be taken (usually a half year).

[C_A]

How can I make ProConnect populate 4797, Part III for the amount of the recapture? I've tried entering an override for the total gain and ordinary income portion under recapture rules, however I'm unable to make it pull through.

[TaxGuyBill]

Sorry, I can't help you there; I use ProSeries, not ProConnect.

In ProSeries we need to manually do the calculation, manually enter it on the bottom of the 4797 and manually add that to the business income.  But I don't know what ProConnect does.

[C_A]

Thank you. I appreciate all the help.

[EmaleeI]

Did you figure out how to enter this into Proconnect?

[C_A]

I did.

Sch D. Carryovers/Misc Info in upper right corner. 4797 Carryover & R. Scroll down to Recapture 50% or Less Business Use. It was necessary to do the calculation manually for the deduction allowable. Then entered the recaptured deprecation on the Sch C.