How do I calculate my cost basis for a used vehicle that I traded in

[mprudencio11]

Hello, I traded in a vehicle I used from business. I began using it in 2017 owned it since 2017 and I traded it in 2018. Paid 11,000 for it and got 6,500. Do I just subtract the purchase price from trade in minus depreciation?

[Anonymous · Accepted solution]

if used for business cost basis is what you paid less what you deducted for business depreciation.    it becomes a lot more complicated if you used standard mileage or switch from actual expenses. part of the standard mileage allowance is for depreciation so that would have to be subtracted from cost.  you would need to research how much that was each year you used std mileage rate. 

like kind exchanges are out for 2018.  so for 2018 you are deemed to have sold the car. 

 if used 100% business $6500 less the net of $11000 less depreciation is your gain or loss.

again it becomes a lot more complicated if not used 100% for business and the business % changed each year.