I am getting an error on line 25 (Trade in Business depreciation). I do not know what to put in A. I did not trade in the vehicle. It was totaled in an accident.
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You will show it as disposed of. If you received insurance proceeds, the amount received will be your "sales" amount. Did you purchase a new vehicle to replace it? If so, the new vehicle will be the one you "traded" for the old.
You will show it as disposed of. If you received insurance proceeds, the amount received will be your "sales" amount. Did you purchase a new vehicle to replace it? If so, the new vehicle will be the one you "traded" for the old.
What about if you still had a loan balance on the car that was totaled? My car was deemed "totaled" and I received a settlement from the party-at-fault's insurance company. I took the settlement and payed the remaining loan amount which left me a little less than 1/4 of the total settle amount. I then took that 1/4 and bought a used car for my business. How do I report that ?
It seems that TT is taking the entire insurance payout as income. Do I only report the 1/4 amount since I didn't realize the entire payoff b/c I owed money to the bank?
The loan balance is immaterial on an income tax return which is why you are not prompted for that information.
You sold the car to the insurance company and bought another car ... just that simple. Trading in a vehicle is no longer reported on an income tax return starting with 2018.
The cost of the vehicle becomes the basis for depreciation and you can only deduct the business portion. Work thru the sale in the vehicle expenses section slowly and let the program do the work for you. If you need more guidance then either upgrade to the LIVE option or call TT support.
you can not count the new vehicle as a trade in.
That is correct in the case of an insurance payout. The bottom line is, you sold the vehicle to the insurance company. What you used the proceeds for after the "sale" has no bearing on anything.
The percentage of the payout equal to the business use of the vehicle is reported as business income. If there's a gain (which I seriously doubt) then it's taxable business income.
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