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You should say it was "not traded in" when answering that you stopped using that vehicle for business. However, you would not have to figure a like kind exchange, since you did not actually exchange that vehicle for another one.
You should "dispose" of that vehicle for your business. You can do that by selecting "Edit" next to the vehicle that was wrecked and enter the date it was totaled.
You will then enter your new vehicle as a new and separate asset and answer those interview questions to determine whether the mileage rate or actual expenses will yield you a bigger deduction.
You should say it was "not traded in" when answering that you stopped using that vehicle for business. However, you would not have to figure a like kind exchange, since you did not actually exchange that vehicle for another one.
You should "dispose" of that vehicle for your business. You can do that by selecting "Edit" next to the vehicle that was wrecked and enter the date it was totaled.
You will then enter your new vehicle as a new and separate asset and answer those interview questions to determine whether the mileage rate or actual expenses will yield you a bigger deduction.
For 2018 taxes the old answers are not valid!
Your middle class tax cut means you pay ordinary gain on your trade in and depreciate your new.
This means that you may no longer treat the trade-in of a business vehicle as a non-taxable event. Instead, when you trade-in an old vehicle for a new one, you must pay income tax on your gain, if any.
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