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Scott CTU
Returning Member

Gain/Loss on Business Vehicle

Fiscal Accounting July 01 to June 30th
Business use 100%
Traded 2018 Cadillac XT5 for 2020 Cadillac XT6

Purchase Price 2018 XT5 10/04/2018 $ 55,437.26
Total accumulated Deprecation $ 55,437.26

Trade in Value $ 27,500.00
loan Balance $ 31,300.80

Total NET Trade in <$ 3,550.80> credit


Here is where it gets tricky
Dealer gave Manufacturer's Rebate on 2020 XT6 $ 2,000.00
Paid Cash of $1,550.80
Brought 2018 XT5 loan Balance to $ 0.00 $ 3,550.80

Purchase 2020 Cadillac XT6 08/13/2020 $66,848.41
New Loan on 2020 XT6 $ 66,848.41

What are the Journal entries
What is the Gain/Loss on this transaction

5 Replies
martinmarks
Level 10

Gain/Loss on Business Vehicle

Your loan balance is not relevant so you have a sale of your old vehicle for $27,500 and it looks like that's all taxable because that asset is fully depreciated. 

Add the other costs to the basis of your new vehicle and subtract the rebate from the basis to get the depreciable basis. 

Note sure how you set up your balance sheet so post what it looks like before the trade in.

Mike9241
Level 15

Gain/Loss on Business Vehicle

  

        DR CR
OLD AUTO           55,437.26
OLD AUTO ACCUM DEPRECIATION     55,437.26  
OLD LOAN         31,300.80  
GAIN OLD AUTO           27,500.00
NEW AUTO         64,848.41  
NEW LOAN           66,848.41
CASH               1,550.80
UNKNOWN DIFFERENCE              250.00
           
           
          151,586.47   151,586.47
Scott CTU
Returning Member

Gain/Loss on Business Vehicle

This is The Journal entry I Have so far 
 db<cr>
Trade-in Vehicle Xt5 -55,437.26
accum dep Xt555,437.26 
   
New Vehicle XT666,848.41 
loan XT6 -66,848.41
   
Trade-In XT5 loan27,750.00 
Gain/Loss Xt5 -27,750
cash from checking -1,550.80
Loan XT5 ( Rebate)2,000.00 
What Account to <cr> -2,000.00
   
Scott CTU
Returning Member

Gain/Loss on Business Vehicle

This is The Journal entry I Have so far 
 db<cr>
Trade-in Vehicle Xt5 -55,437.26
accum dep Xt555,437.26 
   
New Vehicle XT666,848.41 
loan XT6 -66,848.41
   
Trade-In XT5 loan27,750.00 
Gain/Loss Xt5 -27,750
cash from checking -1,550.80
Loan XT5 ( Rebate)2,000.00 
What Account to <cr> -2,000.00
 153,586.47153,586.47
It Balances but is the REBATEon the the newVehicle 
applied to the Gain on sale  
Scott CTU
Returning Member

Gain/Loss on Business Vehicle

i posted what i have on the thread. not quite sure how this works??? Thanks for Help.

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