The FMV (Fair Market Value) is going to be the sticker price of the new vehicle.
The Adjusted Basis of the older vehicle is the:
- Price you paid (do not include interest charges if it was financed), Plus,
- Any improvements that may have increased the life-span of the vehicle (replacement of major components; transmission, engine,) do not include any maintenance (brakes, oil, etc.), Minus,
- Any depreciation you previously took on the vehicle. (If you deducted Mileage this will not apply), Equals,
Adjusted Depreciation
