Removing a vehicle from business use

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dcaru
dcaru Member Posts: 7 Newcomer
edited November 2023 in Filing my taxes

In 2024 I expect to remove my vehicle from business use. I intend to purchase another vehicle to place in service. I expect to recapture depreciation on the vehicle removed from service and depreciate the new vehicle placed in service for tax year 2024. If I close my business later in 2024, will I also have to recapture the depreciation on new vehicle placed in service in early 2024?

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  • KeriC
    KeriC FreeTaxUSA Agent Posts: 93
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    If you purchase and sell a business vehicle in the same year, you won't depreciate it, nor will you need to recapture depreciation since none was taken.

    Source: Pub 946, Page 6 under "Excepted Property"

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  • dcaru
    dcaru Member Posts: 7 Newcomer
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    The answer was "right under my nose"! I hadn't reviewed the IRS instructions in some time.