sole prop- delivery business out with old truck and in with the new

[Accountable2Him]

I have a sole prop that has a delivery business. 2004 purchased light weight cargo van. according to his old returns going back then, the truck did not take advantage of depreciation or section 179. (Line 13 on the Schedule C was blank) used standard business mileage for the life of the truck. 2013 he retired the truck to the junk yard (350,000 plus) so how to get rid of the van in 2013? Does it go on form 4797? then I am having a problem because it is showing there is a loss for the original price of the truck. Because there is no depreciated allowed. Maybe the form does not have to be done because it was never depreciated? Help!!!!!

I am a little confused. Should I continue with his new light weight cargo van as standard business mileage? If I use section 179 it would only apply to this year & he would not get a deprecation deduction in years to follow?

Thank you

Rosanne

[Koss]

Depreciation

The standard mileage rate includes a depreciation component. Just like regular depreciation, it reduces the basis in the vehicle each year.

See the table on page 25 of IRS Publication 463 (2013), Travel, Entertainment, Gift and Car Expenses.

Your client probably has no remaining basis in the vehicle.

BMK