Car/Truck used less then 100% in business and traded in.

[Rich Zellmer]

Three years ago I bought a 6000 lbs SUV for $22K which I traded in this year for $12,500.  This is my wifes car, not my work truck so the business use is not 100%   I am very surprised in how this trade in adjusted the cost basis of my new car.  I think turbotax messed this up as it is telling me to add the total loss (minus the deprecation already taken) to the cost basis of the new car.  This seems right if I was using the car 100% for business but doesnt seem right in my case.   I think only a percentage of that should have transferred since I only used the truck partially for business. 

Let me see if I can explain with some numbers

• 12/2014 - Bought Used truck for 22K
• In 2014 and 2015 this truck wasn't used that much for business so deprecation when multiplied by the business use percent was only about $500 a year or  $1000 in total.
•  We used it 42% for business in 2016 and the deprecation after multiplied by 42% business usage for 10 months was $2000 (We traded it in during October)
• We traded the car in for $12,500.  This means in total we lost $9,500 ($22K-9,500) and previously deprecated $3000.   That means we have $6500 of loss that wasn't deprecated.  

Turbotax is telling me to add that $6500 to the cost basis of the new car.  I would have assumed that this $6500 would be multiplied by some percentage of business use aggregated over the tree years I had the truck.   The way this is set up now is that it seems like if I use this new car (and subsequent) cars only a small amount for business and the un-depreciated loss keeps getting added to an ever increasing cost basis of a new car.   By adding the full $6500 to the cost basis this is allowing me to get a second chance at claiming the reset of the $9500 loss on this car I traded in.   

In theory I could carry this forward a few times with a few car buys.  The carry foward could be high if my wifes percent of business use is low.   After a couple of cars I could have a 100K cost basis.  It seems I could then trade her car for a truck for me that I would use 100% for business.  This would allow me to capture the losses on all these cars as if they were used 100% for business.     That seems awesome but doesn't seem right. 

Anyone do a car trade in this year on a car not used 100% for business.  Was the number added to the cost basis of your new car adjusted due to business use percent over the usage life?