Hi all,
I hope this message finds you well.
I’m considering trading in my business vehicle, which has been used around %92 - 93 for business purposes. I originally purchased the vehicle in 2022 and took advantage of the full bonus depreciation in the first year, amounting to approximately $19,000.
Currently, the vehicle has a loan balance of $9,000 (I understand this is irrelevant for IRS purposes) and a market value of around $14,000, leaving me with about $5,000 in equity if I were to trade it in now.
My plan is to trade in the vehicle at the end of the year and purchase a new business vehicle valued at least $28,000. Given that I expect higher-than-anticipated business income this year, I’m trying to determine the best course of action. As far as I know, bonus deppreciation is %60 for 2024, and %40 for 2025.
Could you please advise on the tax implications of trading in the vehicle and purchasing a new one in December 2024? Alternatively, would it be more beneficial to delay this transaction until 2025?
Thank you in advance for your insights.
