When determining the sales price for a vehicle you traded and took a loss on, you should include the amount you received for the trade-in. Here’s a clear and concise breakdown:
Sales Price: This is the amount the dealer gave you for the trade-in. For example, if your new vehicle cost $30,000 and the dealer gave you $10,000 for your old vehicle, the sales price of the traded vehicle is $10,000
Expense of Sale: This includes any costs directly related to the sale, such as advertising, commissions, or fees paid to the dealer
Adjusted Basis: To calculate the gain or loss, you need to know the adjusted basis of the vehicle. This is typically the original cost minus any depreciation taken
For more detailed information, you can refer to the following sources:
