Gains and losses when trading in a vehicle

[thisisonehappycamper]

There are 3 pages after your mileage deduction calc that ask for Sales Price, Vehicle Cost, Gains and loss. 

When vehicle is traded in and has only used mileage deductions, for both  biz vehicle (both 98% biz), is the Sales Price page even used, if so, do you input trade in value shown as sales price? Vehicle Cost page is the sales price of new vehicle minus trade in?

then Gain or loss Basis is again the trade value if car isnt worth much or mileage x a given percentage from the year previous? (as depreciation-even though you never depreciated vehicle) It seems like your getting hit on this 3 x's. I'm confused.

Using 3000 as a trade value- 30,000 as final cost of new vehicle including the trade, how would these numbers input on those pages?

Thanks for the help

[Cynthiad66]

Your trade-in is a taxable event since you can no longer treat it as a like-kind exchange; you have to treat the transaction as a sale and a purchase. Therefore, you need to report the vehicle you traded in as the sale of business property.

When you use the standard mileage rate, depreciation is a part of the actual per mile rate.  The portion of the business standard mileage rate that is treated as depreciation will be 27 cents per mile for 2020, 1 cent more than 2019, one of the few amounts that is increasing.

Here is how -- Edit your Vehicle, and indicate you 'stopped using it for business' on x/x/2020 (screenshot).  TurboTax will ask questions about ownership, other vehicles, business mileage in 2020, etc.

Since you traded in the vehicle, you could enter $0 as a sales price, and subtract the amount of trade-in you received from the new vehicle's basis when you enter it as a Business Asset.  

Or, you could report the Sales Price as the trade-in amount, and set up the new vehicle with a cost basis of what you paid for it. 

When entering these amounts use the % of Business Use as your entries.

If you have been claiming Standard Mileage for your business mileage, depreciation is included in the deduction. 

Here's how to calculate the Standard Mileage Depreciation Equivalent (use the same amount for 'Basis for gain/loss' and 'Basis for AMT gain/loss'):

"Depreciation equivalent for total miles is a small portion of depreciation that is included (by default) when using standard mileage rate for your business car.  When you take standard mileage rate while deducting your business car miles, you must account for 'depreciation equivalent' when disposing of that car. 

[thisisonehappycamper]

Thank you, that helped me get the numbers . 

Can You help with something else? 

When I uncheck married filing jointly to mf seperate, and spouse income and spouse is still listed under me, the turbotax program drops the tax amount by  roughly 32%. Why would that be since the combined income is still the same, adding spouses w-2 as mine . I would expect the tax to pay would raise.  I'd obviously like to pay less so is this just a glitch?

Thanks again

[Bridgetsmom]

I'm completely confused.  I am a 1099 self employed Realtor.  In 2020 I traded a 2011 vehicle with a $12,350 trade in value for a 2020 vehicle with a sales price of approximately $30,000.  Original cost of the 2011 was $34,111 after a $5000 trade in credit.  How do I compute Sales Price (business portion only), Vehicle Total Cost, Basis for Gain/Loss, Basis for AMT gain loss, Prior Depreciation Equivalent, and AMT prior depreciation equivalent? Thank you for any help.