Level 5

Recording the loss from a business vehicle that was traded in.

Forum|Forum|2 years ago
August 31, 2023
1 reply
7 views

When a business vehicle is sold for a loss which we already established is a deductible business loss based on a previous chat. I just found out that the vehicle was on only used 90% for business and 10% personal but the entire asset was recorded on the 1120S books. Is only 90% of the loss deductible as a business expense? The Proconnect software does not appear to be calculating the loss correctly from my review. I am having difficulty making the business loss work as reported on the Shareholder's K-1. I don't like overriding the software whenever possible.

Thanks in advance for your assistance.

This topic has been closed for replies.

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TaxGuyBill

Level 15

I think it is a 100% business asset because the 10% personal miles should have been added as taxable income to their W-2.

A

AnmarieAAuthor

Level 5

This is a new client for me and their W-2 that is prepared but another organization did not report the 10%

personal on their W-2 as it only reflects their wages and health insurance as a S-Corp medical. This being the case should I only record 90% of the loss as business expense as it all gets reported on the K-1 and flows through their personal return from what I can see in Proconnect.

Do you think differently?

T

TaxGuyBill

Level 15

Just because thing were previously reported incorrectly doesn't change the fact that it is a 100% business asset. I would report it as a 100% business asset.

Advise the client that prior W-2s are wrong, and ask if they want to hire you to amend them and any applicable 1040s that have already been filed.

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