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Jessica A
July 20, 2020
Question

Company Vehicle Sold

  • July 20, 2020
  • 3 replies
  • 43 views

In need if help on how to correctly list a company vehicle sold in QuickBooks as well as correctly entering the deposit via check into QuickBooks. Running Cash basis, & 2018 QuickBooks.

3 replies

john-pero
john-pero
Level 12
July 21, 2020

Start in the deposit by entering payment detail to an income account for equipment sales or miscellaneous gain on asset sale.

 

Add on the next line the total sum of depreciation taken on the vehicle as a negative number, line 3 is original purchase price of vehicle and what usually is its book asset value. Line 4, if needed would be an adjustment to the income account so that net deposit equals check amount

Jessica AAuthor
July 21, 2020

 I am not sure what the depreciation would be on the vehicle or how to figure that out .  There is an account set up for gain/loss as an income account so recording the check deposit under that account isn’t an issue. As far as adding more lines under the deposit that would throw things off because it would make the deposit more than the check amount.

john-pero
john-pero
Level 12
July 21, 2020

What I meant was, normally in the course of business a company expenses a vehicle through depreciation. Sometimes a vehicle is eligible for full writeoff up front, sometimes a vehicle is sold before it is written off.

 

Your depreciation schedule would tell you this.

 

If the vehicle was entirely written off then 100% of proceeds would be income, but even then there is a thing called recapture and some of the proceeds might be subject to capital gains treatment rather than ordinary gain. There is a separate form for that and it is a tax issue but any book value of the vehicel on your books has to be eliminated through the sale.

 

What I was getting at is, say your vehicle is still on the books at $5000 but you sold it for $7500. You will not have $7500 taxable and that's where the deposit lines are

 

1. income $7500

2. asset     ($5000)

3. gain on sale  $5000

 

net deposit is equal to check but you got the vehicle off the books. Same thing can be accomplished in a sales receipt and treat the payment as Undeposited Funds to deposit.

 

Here is some info on recapture - you may wish to pay your tax CPA for advice  https://www.investopedia.com/terms/d/depreciationrecapture.asp  

 

 

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