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June 5, 2019
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I used a vehicle for business and traded it in for another business vehicle in June. I'm having trouble figuring out the deductions for both vehicles.

  • June 5, 2019
  • 2 replies
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Best answer by MichaelDC

You purchased your business vehicle as part of a trade-in then and need to handle the trade-in for the old business vehicle. Just to walk through the interview for this trade-in by following these steps:

For your old business vehicle:

  1. Go to the Federal Taxes tab
  2. Go to Wages and Income
  3. Select I'll choose what I work on
  4. Click Update on the line for Business Income and Expenses (Sch C)
  5. Click Edit on the line for your business
  6. Follow the prompts until you come to the page Business Expenses 
  7. Click Start/Update on the line for Cars, trucks, and other vehicle expenses
  8. Click Edit on the line for your old vehicle
  9. Indicate that you own the vehicle
  10. Follow the prompts until you come to the page Are You Still Using Your vehicle for Business and answer No then enter the date you sold it
  11. Follow the prompts until you come to the page Did You Trade in Another Vehicle to Purchase this vehicle?This may be where you have entered that it was purchased as a trade-in. Answer accordingly
  12. Follow through the prompts and you will be guided to a page titled Trade-In Link
  13. Click on the Edit Trade-In button and make sure the vehicle in the list given is highlighted, then click Delete
  14. You will be taken to a Delete Confirmation page and you will answer Yes. This will remove the Form 8824 which is tied to trading in a vehicle
  15. Follow the prompts to indicate that this vehicle was sold, not traded in, and to enter in any relevant information regarding this sale.

2 replies

MichaelDCAnswer
Employee
June 5, 2019

You purchased your business vehicle as part of a trade-in then and need to handle the trade-in for the old business vehicle. Just to walk through the interview for this trade-in by following these steps:

For your old business vehicle:

  1. Go to the Federal Taxes tab
  2. Go to Wages and Income
  3. Select I'll choose what I work on
  4. Click Update on the line for Business Income and Expenses (Sch C)
  5. Click Edit on the line for your business
  6. Follow the prompts until you come to the page Business Expenses 
  7. Click Start/Update on the line for Cars, trucks, and other vehicle expenses
  8. Click Edit on the line for your old vehicle
  9. Indicate that you own the vehicle
  10. Follow the prompts until you come to the page Are You Still Using Your vehicle for Business and answer No then enter the date you sold it
  11. Follow the prompts until you come to the page Did You Trade in Another Vehicle to Purchase this vehicle?This may be where you have entered that it was purchased as a trade-in. Answer accordingly
  12. Follow through the prompts and you will be guided to a page titled Trade-In Link
  13. Click on the Edit Trade-In button and make sure the vehicle in the list given is highlighted, then click Delete
  14. You will be taken to a Delete Confirmation page and you will answer Yes. This will remove the Form 8824 which is tied to trading in a vehicle
  15. Follow the prompts to indicate that this vehicle was sold, not traded in, and to enter in any relevant information regarding this sale.

June 5, 2019
I don't understand why you would do #15, as it WAS traded in, not SOLD.
January 22, 2025

On a farm return how do I enter a new tractor when I traded in an old tractor that was fully depreciated?

 

Thanks

January 22, 2025

You need to treat the trade-in value of the old tractor as a gain on sale of it, since it was fully depreciated. Then, you can add the new tractor as a farm asset and depreciate the cost of the new tractor.

 

You will start by entering the Business section of TurboTax and accessing your farm income and expenses entries. On the screen that says Your Farming Income and Expenses, choose the Farm Assets option, and then Assets depreciated in TurboTax associated with this farm. Update that section and say "Yes" to the option of going directly to your asset summary.

 

There you will see the tractor you traded in. Edit that section and when you come to the screen that says Tell Us More About This Farm  Asset, check the box that says the item was sold. Work through the rest of that section to enter the information regarding the sale of the tractor, and enter the trade in value as the sale price.

 

To add the new Tractor, go through the same steps but indicate that you are adding a new asset.

 

@ckrieg

 

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