Sale of car/Mileage

[Gretel]

I have exhausted my research capabilities. Last one was Google, which turned up only one result: The Taxbook (where I wasn't able to find the answer).

Bus.Auto is sold for $300. Bought for $1,800. SMR was used, depr.component over $2,000. I think the gain is only $300 ordinary income and depreciation by itself cannot create add.gain. Is this correct? Where can I find authority?

[S T]

Do you have

Gabriele,

Do you have CFS tax tools? There is a worksheet there for sale of business vehicle using
SMR.

If not, email me and I will do the worksheet and fax to you

Sandy

[solomon]

I have exhausted my research capabilities. Last one was Google, which turned up only one result: The Taxbook (where I wasn't able to find the answer).

Bus.Auto is sold for $300. Bought for $1,800. SMR was used, depr.component over $2,000. I think the gain is only $300 ordinary income and depreciation by itself cannot create add.gain. Is this correct? Where can I find authority?

Agree with you but Pub. 463 says using SMR the depreciation component can not reduce basis below zero.

[Gretel]

Thank you so much, Sandy and Solomon.

Solomon, This is what I was looking for. I guess it is a general rule that basis cannot go below zero not matter in what context used.

Sandy, I am fine now with this confirmation but thanks a million.