My tax software is setting up an IRS Form 4797 for business property that is no longer being used for business. The asset in question is a vehicle that is also listed property and has never been used for more than 50% of the business.
In past years I essentially just deducted a percentage of the total actual depreciation and expenses based on actual use but I ceased using it for business at the end of the prior year and it was traded in. I have never taken any Section 179 deduction on it.
The software wants to add a Form 4797, which I gather was triggered earlier in the interview by me noting the vehicle is now no longer used. I've reached a step that had a checkbox automatically marked for "Sale of business property with a drop of business use to 50% or less".
But the property was never used for more than 50% so it hasn't fallen from a higher number. I'm not sure the software was written to handle or explain this case.
Do I continue with the form, noting that the trade-in value was less than the market value? Or does this form not apply?