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MACRS Property Like-Kind Exchange

I was notified that I have an error in the Car & Truck Expenses Worksheet.  On page 4 under the subject noted above, line 77 is showing as an error, but I don't know how that number got there, and what I need to do to fix it ... I looked at "Tax Help" as suggested, but it doesn't make sense.  The program entered the "acquired" amount; I don't understand why we have anything in this section because we are still using the truck. (By the way, for some reason the program entered "no" on page 3 on line 57.)  What is the "excess basis"?  Thanks.

9 Replies

MACRS Property Like-Kind Exchange

Did you actually enter this transaction as a like-kind exchange?

 

Tax reform eliminated like-kind exchanges for all classes of property except real estate. As a result, you need to enter the transaction as the sale of the old truck and the acquisition of a new truck (i.e., not as a trade-in/like-kind exchange).

MACRS Property Like-Kind Exchange

No ... I entered the information as the new purchase with a trade-in ... I thought all of that info carried forward every year but it didn't this year.  We're still using the truck just like we have when we first declared it for our business in 2017!  If that's why I'm in this mess, how do I fix it?  thanks ...

MACRS Property Like-Kind Exchange

That should not have been problematic unless you indicated that this was an exchange.

 

Can you enter Forms Mode and check your forms list? Do you have a Form 8824?

MACRS Property Like-Kind Exchange

Trading in a car is the same as a like kind exchange ... it cannot be done anymore.  So you technically have a sale and a separate purchase.  

MACRS Property Like-Kind Exchange

what you need to do is enter the trade-in value of the old vehicle as its sales price.  this will result in a gain or loss that will show up on form 4797 page 2

then you enter as a new asset the purchase price of the new truck, ignoring the trade-in value

MACRS Property Like-Kind Exchange

No ... I just looked thru everything I've been working on and in the forms section of the return ... I don't see a form 8824.

MACRS Property Like-Kind Exchange

MACRS Property Like-Kind Exchange

Thanks, but I do not believe we have a "like kind exchange" ... we are still using the vehicle we declared in 2017 as purchased new with a trade-in. This issue only came up this year when I had to enter all of the 2020 info in again because our information didn't carryover from the last, nor the previous years.

MACRS Property Like-Kind Exchange

I was just reading the information in the forms section for the Car & Truck expenses worksheet, and found in Part VI, line 33 there are the entries as they should be on 33a and 33b, but there is also an entry on 33c !!  I'm pretty sure it shouldn't be there, and is it OK for me to delete it??   or do I need to delete the whole sheet and start all over for that section??? 

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