@HHI2024
I understand the questions. My questions are relevant because the way the purchase was recorded might matter. I asked about whether or not the personal use was reported as income to the owner because when you depreciate the vehicle, you're using the actual expense method. Just because you depreciated the vehicle pro-rata, doesn't mean that you reported the owner's pro-rata personal use as income for the other actual expenses (fuel, maintenance, etc.). Just confirming.
You will need to book the correct depreciation expense through 12-14-23. It depends on when the vehicle went into service. Any distribution amount beyond tax basis is taxable. Here's the journal entry to record the distribution
| | DR | CR |
| Accumulated Depreciation | 30,541.28 plus 2023 depreciation | |
| Loan payable (to close) | 7,516.00 | |
| Owner's Equity (depends on business type) | 42,490.72 less 2023 depreciation | |
| Vehicle Asset (to close) | | 80,548.00 |
