i trade in my old business car for a new business car, how should i enter in turbo tax?

[leo]

i traded in my old business car for a new business car. both are for the same business, same 90% business usage. how should i report it in Turbo Tax? 

[KrisD15 · Accepted solution]

Report it HAS IF YOU SOLD  the older vehicle. 

Use the Trade-in value as the selling proceeds. 

Trade-in for a Business vehicle COULD be treated as a "Like-Kind" exchange years ago, but that was eliminated. 

Be sure to add that trade-in value to the basis of the NEW vehicle. 

So, if the new vehicle was 45,000 and you got 5,000 trade-in value, (so you had to give the Dealer 40,000)

report that the old vehicle was sold for 5,000

and the new vehicle was bought for 45,000. 

[leo]

thanks for the response, super helpful. one more caveat, my old business car still have loan on it, how to adjust the numbers?

just continue your example, new car is $45,000, old car has a trade-in value of $5000, but still has $2000 loan balance. means i need to give dealer $42,000 ($45,000 - $5000 + $2000) to get new car. Should I report old car sale as $5000? or $3000?

[AmyC]

A loan is not relevant to the IRS. You don't get a deduction for owing money. The value of the car is the sales price, not the value minus the loan.