Question

Do I need to complete Car sales price section (schedule C) just because I traded my car in for another?

Forum|Forum|6 years ago
March 2, 2020
1 reply
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in 2019 I traded in my 5 year old vehicle in for a newer one. The net cost to me was about 20K. I plan to use this new car for about 50% business as I did the old. Do I have to complete the Sales Price section? I have traded in vehicles in the same circumstances in the past and do not recall my old accountant ever asking me the price I paid or commissions earned by sales people, etc. Please help!

A

Anonymous

yes if you used your old car for business. the like -kind exchange provision (section 1031) was eliminated for must trade-ins. you need to allocate the cost and sales proceeds between the business and personal use based on mileage

then the business portion of the sales price (trade-in value)

less business portion of cost reduced by business portion of depreciation (even if you used standard mileage there is depreciation included in that)

that your business gain or loss

the cost of the new vehicle is now not reduced by the trade in value.