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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.
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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