Help with new vehicle purchased with trade-in.

  • Creator
    Topic
  • #199424
    ILCPA2014
    Participant

    New vehicle: $ 40,000

    Trade-in value (old): 2,500

    Cash paid: $39,000 (37,500+1500 fees)

    Old vehicle Basis: 4,000 (32,000-28,000)

    How much is my new tax basis?

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  • #754270
    Anonymous
    Inactive

    in a LKE (assuming this is 100% biz use) you simply add the basis of your old vehicle to the $/consideration you gave up for the new vehicle.

    so that would be 39,000+4,000(basis old) = 43,000 basis in new vehicle new. you got sales tax in the 39,000? is that part of the 1,500 fees i assume?

    leasing is the way to go in 90% of the cases for biz use vehicles. from a tax standpoint of course, not practicality (for example with leasing you dont own the vehicle and some people dont like it or the mileage limit the dealer subjects the lessee to)

    #754271
    Anonymous
    Inactive

    in a LKE (assuming this is 100% biz use) you simply add the basis of your old vehicle to the $/consideration you gave up for the new vehicle.

    so that would be 39,000+4,000(basis old) = 43,000 basis in new vehicle new. you got sales tax in the 39,000? is that part of the 1,500 fees i assume?

    leasing is the way to go in 90% of the cases for biz use vehicles. from a tax standpoint of course, not practicality (for example with leasing you dont own the vehicle and some people dont like it or the mileage limit the dealer subjects the lessee to)

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