4797 Gain Calculation

[B. Jani]

Hello Friends:

Using ATX - MAX

My client using car for business use since 2003. Always claimed standard mile deduction. The cost of the car was $20871 and he donated the car last year. ATX calculating cost basis as $5218 in Part I of 4797 and calculating long term gain of $15653 which goes to D and then line 13 of 1040.

My question is: Is this correct calculation or I am missing something on asset entry. How do I fix this?

TIA.

[Mr. Pencil]

My client using car for business use since 2003. Always claimed standard mile deduction. The cost of the car was $20871 and he donated the car last year. ATX calculating cost basis as $5218 in Part I of 4797 and calculating long term gain of $15653 which goes to D and then line 13 of 1040.

Missing numbers, so can't follow the calculation. The donation constitutes a conversion to personal use (and disposition) of FMV times aggregate percentage of business use. And the basis is likewise pro-rated and reduced by the total annual depreciation factors for the business mileage. Cars don't hold value so your gain if any is probably just depreciation recapture. Anyway, 4797 not Schedule D.