Section 179

If I purchased a vehicle for my business in 2018, and elected to take 100% depreciation. Then the following year I trade in the vehicle for another for business use, will I potentially have a recapture situation? So let’s say I paid $25k, and the following year, I purchase a $50k vehicle and trade mine in for $20k, and finance the remaining $30k. What would happen?

posted

Connect with an expert

1 Reply

Section 179

Under the new tax law you can't defer the gain on the disposition of a vehicle into another vehicle.

See the IRS website: Like kind exchanges are now limited to real property.

You have to report your transaction as a sale of your old vehicle and then add the vehicle you received as a new asset.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Still have questions?

Questions are answered within a few hours on average.

Post a Question

*Must create login to post