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kegan51
Returning Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

 
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CathiM
New Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

Because the new vehicle is leased, you can't do it as a "trade in" on your tax return. You have to dispose of the old vehicle that you owned. The lease is not entered as an asset and depreciated (unless it was a capital lease, which vehicles are usually not). Your lease payment is a deductible expense if you use actual costs (usually better than mileage deduction for leased vehicles) and the deposit is usually prepaid lease payments. You do have to enter the leased vehicle information, just don't put it in the asset/depreciation section.

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5 Replies
CathiM
New Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

Did you go from a leased vehicle to owning or another lease?
kegan51
Returning Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

From Financed with money owed to Leased.   Dealer paid the balance owed and I paid $3,000 for new vehicle as initial cost/deposit which is a leased vehicle.
CathiM
New Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

Because the new vehicle is leased, you can't do it as a "trade in" on your tax return. You have to dispose of the old vehicle that you owned. The lease is not entered as an asset and depreciated (unless it was a capital lease, which vehicles are usually not). Your lease payment is a deductible expense if you use actual costs (usually better than mileage deduction for leased vehicles) and the deposit is usually prepaid lease payments. You do have to enter the leased vehicle information, just don't put it in the asset/depreciation section.

kegan51
Returning Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

Thank you for your help, my only question now is knowing exactly where to enter this. I am currently filling out the income and expenses info.  Is this the correct area under Vehicles or is there another section?
CathiM
New Member

Is the Fair Market Value the sales price on new leased vehicle? What does FMV for old traded in vehicle mean? Dealer paid balance off old car, I paid $3k towards new.

Yes, use the Vehicles section, there are options for leased vehicles.
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