During 2017, Myca sells her car for $5,000. She acquired the car in 2013 for $11,000 and has used it 60% for business and 40% for personal use. She deducted $5,280 in depreciation. What is the taxable gain or loss from the sale of the car attributable to her business use?
A)$3,680 gain
B)$432 gain
C)$720 loss
D)$2,280 loss
E)$1,680 gain

Question

Quizplus · Accepted Answer

The business portion of the car's cost is $11,000 * 60% = $6,600. The depreciation deducted for business use is $5,280, so the adjusted basis for the business portion is $6,600 - $5,280 = $1,320. The business portion of the selling price is $5,000 * 60% = $3,000. The taxable gain for the business use is therefore $3,000 - $1,320 = $1,680.

During 2017, Myca Sells Her Car for $5,000