Question

Trade-in / New vehicle

Forum|Forum|5 years ago
March 3, 2021
1 reply
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In 2017 tax year I bought a new vehicle after my other vehicle was totaled. I used the standard mileage deduction from 2010-2017 for the totaled vehicle and I am confused at what i should be entering for the auto tradein. Turbotax has

1.Depreciation at 100% business use,

2 AMT depreciation at 100% business use,

3 total actual depreciation deducted

4 AMT total actual depreciation deducted.

ColeenD3

Are you preparing 2017 taxes? Why is it a trade-in? If you totaled your car, was the purchase of the new one from insurance proceeds?

Below is one scenario if there is no insurance:

Abandonments

If a vehicle used in a trade or business is permanently discarded before the end of its expected useful life, a loss may be claimed. Under most circumstances the loss will be equal to the adjusted basis of the vehicle, in which case your sales price would be zero. You would have to calculate your depreciation equivalent which is explained in the Learn More in the screen shot below.

J

jwhittakerAuthor

I am preparing 2017 taxes, my vehicle was totaled in that year, and purchased a new one. I did get insurance from the total vehicle which i used as part of the purchase the new vehicle + cash.

ColeenD3

Yes, then since it was from 2017, you will show it as disposed of. If you received insurance proceeds, the amount received will be your "sales" amount. If so, the new vehicle will be the one you "traded" for the old.

Since I don't have a 2017 program, I can't work through the problem.

Please see this IRS publication for the trade-in.

Vehicle trade-in. If you traded in one vehicle (the “old vehicle”) for another vehicle (the “new vehicle”) in 2017, there are two ways you can treat the transaction....

2017 2106