[itsj0nathan]

Here is a question….Say for example I just traded in a vehicle to purchased another vehicle, how would I book this entry? I know this would most likely be booked as a fixed asset and then depreciated over time. But lets take that out If Id rather expense this at once. Do I book the trade in $ as a revenue? Or would you just expense the entire Dr $15K expense and CR $15K cash?

New Car -$20,000
Trade in: ($5,000)

Total Cost $15,000

BEC- 71, 7/02/16
AUD- 67
FAR- 08/27/16
REG- 10/15/16

[Kerias]

Review like kind exchanges

[ohiocpacma]

Tax wise – I don't know. Not a tax accountant.

Accounting wise:
Trade in should be considered a sale of an asset (Gain/loss as revenue).
The new car would be capitalized at it's price of $20K and depreciated.

[StudyNowCPA]

Review like kind exhanges!! This will be on the exam and there are special rules for this. You will need to know this! BTW… as a general rule it will never be that easy…dr exp and cr cash when assets are involved.

[Author]

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