Vehicle disposal ( was a trade for similar asset) . What is causing the error on the 4797 form.

Forum|Forum|2 years ago
June 17, 2023
2 replies
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Can you clarify the exact lines that need to have the sold vehicle info on it.?

On the truck worksheet what number need to be on what line? The trade value 12k, original value - 100% bus use with a cost of 42k, fully depreciated at trade time. Any tips for this is appreciated. I am STUCK!

Thank you

Best answer by Critter-3

Due to tax law changes in force between 2018 & 2025 you can no longer "trade in" one vehicle for another ... in the TT program you must sell the old vehicle and enter the new vehicle as an asset.

If the sold vehicle is not still listed as an asset then either enter it again showing it is fully depreciated OR sell it off in the Sale of Business Asset section later in the program.

If you are doing this manually then here is the form instructions : https://www.irs.gov/forms-pubs/about-form-4797

Critter-3Answer

Due to tax law changes in force between 2018 & 2025 you can no longer "trade in" one vehicle for another ... in the TT program you must sell the old vehicle and enter the new vehicle as an asset.

If the sold vehicle is not still listed as an asset then either enter it again showing it is fully depreciated OR sell it off in the Sale of Business Asset section later in the program.

If you are doing this manually then here is the form instructions : https://www.irs.gov/forms-pubs/about-form-4797

Carl11_2

Employee

Don't know if this is for SCH C or SCH E. But regardless, if you originally were reporting the vehicle in the "vehicle assets" section, then in that same section you'll report that you sold it for it's trade-in value. If the vehicle was fully depreciated at the time you "sold" it, then the cost basis of the vehicle is zero and whatever you "sold" it for is reportable income.