How do I report the VW diesel buyback for a business vehicle? Is it an abandonment loss, should the settlement amount be rolled into the basis for a new vehicle, or ...?

[hfwebber]

Using TurboTax Home & Business (CD)

[AmandaR1]

If you have a 'trade-in' or a similar transactions (qualified for the IRS), then there is a special calculation that effectively allows you to defer any gain through the basis in the new vehicle. This is advantageous because normally any depreciation taken must be recaptured as ordinary income. 

If VW forced a buyback and in turn you bought another vehicle, yes, that sounds like it would qualify (as long as it all happened at the same time). Otherwise, sale, abandonment or stopped using for business, are all treated the same in the software. If you didn't receive anything then the sale price is $0.