topic Sale of Business use vehicle/purchase of second hand vehicle in Business & farm

Sale of Business use vehicle/purchase of second hand vehicle

Srell — Thu, 21 Oct 2021 19:41:23 GMT

Any advise on how to handle the following: Business use vehicle (90%) used section 179 when put into service 10 years ago. Plan on selling it to purchase a second hand vehicle for business use. sale is approximately $25k, purchase is approx $21k. How do I handle this is Schedule C?

Thanks in advance

Re: Sale of Business use vehicle/purchase of second hand vehicle

Critter-3 — Thu, 21 Oct 2021 20:03:17 GMT

You will have a sale of one vehicle and the addition of another as an asset. The option to "trade in" the car for another is no longer allowed. Just follow the screen instructions in the program.

Re: Sale of Business use vehicle/purchase of second hand vehicle

Mike9241 — Thu, 21 Oct 2021 20:09:04 GMT

there is no 179 recapture because you have owned and used it for its entire depreciable life, so if you took 179 on 90% of the cost your tax basis in it is $0 so 90% of the sales price would be taxable income the other 10% of the sales price would not be reported because that represents your personal portion. in the disposition section for the vehicle enter 90% of the sales price

Re: Sale of Business use vehicle/purchase of second hand vehicle

Srell — Thu, 21 Oct 2021 20:54:24 GMT

How do I show depreciation of the vehicle purchased if it is used, not new?

purchase of second hand vehicle

Srell — Thu, 21 Oct 2021 20:58:00 GMT

How do I show depreciation of the vehicle purchased if it is used, not new?

Re: purchase of second hand vehicle

Anonymous_ — Thu, 21 Oct 2021 21:42:24 GMT

@Srell wrote:

How do I show depreciation of the vehicle purchased if it is used, not new?

You simply add the used vehicle as an asset in the program.

It makes no difference that the vehicle is used rather than new. Use your total purchase price as your basis for depreciation.