I Purchased a car in January 2018 for $40,000; I started using my car for Uber and Lift in June 2018. By June 2019 my car had too many issues and the dealer gave as the remaining value of the car to pay off the balance of the existing loan of this car which was $20.000 .
I purchased a new car for 42,000 and started using it in July 2019 also for Uber and lift and personal use.
The question is: should I consider this as exchange or trade in? How I deduct the loss ?
I lost a lot money because I had made a new loan to start all over.
Q. Should I consider this as exchange or trade in?
A. It's a sale of the car, a personal asset.
Q. How I deduct the loss ?
A. You don't get a deduction on the loss on the sale of a personal asset. All your business deductions are already included in the mileage allowance you previously claimed. Even if you claimed "actual expenses"instead of the mileage, the depreciation you claimed is the only deduction allowed.
You can potentially deduct a business loss based on the business percentage of the vehicle. However, TurboTax is not really set up for that, so you may want to go to a tax professional.