Reporting the trade-in of a business vehicle

Forum|Forum|2 years ago
March 31, 2024
2 replies
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A taxpayer received trade-in value for a new vehicle. Both the old and new vehicle will be used in her Schedule C business (included in Depreciation Section). I see the Disposition tab in the detail section for the asset which has like-kind exchange input, but not trade-in input. Do I utilize the Like-Kind input to calculate any gain/loss as well as the basis of the new vehicle?

Thanks for your input.

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Best answer by TaxGirl3

No, like kind exchanges are no longer allowed for business personal property (only real property). What you described would be treated as a sale of the old vehicle (sale price is the trade in value) and a purchase of a new vehicle.

T

TaxGirl3Answer

Level 5

No, like kind exchanges are no longer allowed for business personal property (only real property). What you described would be treated as a sale of the old vehicle (sale price is the trade in value) and a purchase of a new vehicle.