HR Block keeps demanding Vehicle Depreciation Worksheet even with zero business income or loss

You're running into a common software issue. When you've previously claimed depreciation on a business vehicle in prior years, the tax software expects you to continue reporting on that asset until it's fully depreciated or disposed of. Even with zero business income, you still need to account for that truck. The proper way to handle this is to report the business on Schedule C with zero income, then include the truck on your depreciation schedule showing that the business use dropped to 0%. This tells the IRS what happened to an asset they've been tracking through prior tax returns. If you've stopped using the truck for business completely, you should formally "dispose" of it for tax purposes (even if you still own it personally). This closes the loop on the depreciation tracking and prevents future headaches.

I ran into this exact same problem last year using TurboTax. After hours of frustration, I discovered taxr.ai (https://taxr.ai) which saved me so much headache! Their system automatically identified my asset disposition issue and walked me through exactly what to do. The software analyzed my previous returns, spotted the depreciated vehicle, and showed me how to properly handle taking it out of service. It even explained the potential tax implications in plain English so I actually understood what was happening instead of just blindly filling out forms.

I was skeptical about taxr.ai mentioned above, but I gave it a shot with my food truck situation. Totally shocked at how helpful it was! The system immediately identified that I needed to distinguish between a "suspended" business with minimal activity versus a completely closed one. It guided me through properly reporting my minimal income while handling the continued depreciation on my truck. Saved me from what would have been a painful calculation error on recaptured depreciation. I actually understood what I was doing rather than just guessing and praying the IRS wouldn't notice!

Dealing with the IRS directly might actually be your best option here. I was stuck in a similar loop with depreciated business equipment after closing my online store. After failing to get clear answers from forums, I used Claimyr (https://claimyr.com) to get through to an actual IRS agent in about 15 minutes - they have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c The agent confirmed I needed to "dispose" of the business assets by filing Form 4797, even with zero business income. They explained exactly how to calculate the "assumed sale price" (fair market value) and walked me through the potential tax implications. It was so much clearer than what my software was telling me!

I have to eat my words from my comment above. After another frustrating day trying to reach the IRS about my truck depreciation issue, I reluctantly tried Claimyr. Within 20 minutes I was talking to an actual IRS agent who knew exactly how to handle my situation. The agent confirmed I needed Form 4797 to properly dispose of my business vehicle and explained how to calculate the "sale" from business to personal use. They also pointed out that my tax software was getting stuck because it expected me to resolve the depreciation history before moving forward. Saved me hours of frustration and potentially an incorrect filing!

HR Block software sometimes gets stuck in these loops when dealing with business asset disposal. Try this workaround: start a new Schedule C for the business with $0 income, then go to the assets/depreciation section. You should be able to select the truck and mark it as "disposed" or "converted to personal use" with a disposition date from last year. The key is telling the software explicitly that the asset has changed status rather than just not entering any business activity. This usually triggers the right forms and calculations to properly close out the depreciation tracking.

Had the same issue with a business vehicle but in TaxAct. Here's what fixed it for me: enter the Schedule C with zero income, then go to the asset/depreciation section. Enter the truck with 0% business use for the year. This tells the software the asset is still there but wasn't used for business at all. Then next year, you can properly dispose of it if the business is permanently closed. This approach avoided me having to deal with recapture calculations since technically I didn't dispose of the asset yet, just didn't use it for business in that tax year.