Yes, this is a like-kind exchange. This will remove
the old car, replace it with the new car and carry your basis
and depreciation to the new car. Depreciation is included in the standard
mileage rate. See the screenshot below.
Like kind means
property of the same nature or character. Generally, if you exchange
one item of property for another property of a like kind, tax rules provide
that no gain or loss is recognized.
Entering Like Kind
Exchanges in TurboTax
In TurboTax, follow
these steps to go to the entry screen for this topic:
1. In the TurboTax search box, enter like kind and press the Enter key.
2. Click on the Jump to like kind link.
3. Select the type of Property Sale and follow
the interview screens.
After you have entered
your first like kind exchange, you will be given the option of adding
additional like kind exchanges you might have. Click on the Add an Exchange button and follow the prompts to add the
next like kind exchange.
NOTE: If you did not
do a like-kind exchange, you would have to tell the IRS that you are no
longer using the old car for business. You would have to report the
disposition. You would have to calculate a gain or loss on the old
car.
-
If you use the actual expense method to deduct your business driving,
you calculate and separately deduct your depreciation deduction each
year.
-
If you use the standard mileage rate, you get no separate deduction
for depreciation because it is included in the standard rate. To determine how
much depreciation you’ve taken, multiply the total business miles you drove the
car by the amount of the standard mileage rate that accounts for depreciation. See the screenshot below.
Additional
information:
What is a like-king exchange?
https://ttlc.intuit.com/replies/3301982
