I have a side job and deduct the mileage I drive for it. Toward the end of 2017 I got a new vehicle and sold the old one. How do I fill out the info for this?

[musician98]

Not sure if this makes any difference, but I was done with all my side job work by the time I got a new vehicle.  On the vehicle info page it has a box to check if "I stopped using this vehicle in 2017." Then there's a sub-box that appears asking "Tell us when you sold, traded-in, gave away or stopped using your vehicle for business in 2017". Technically I sold my old car a few weeks after buying a new one. Would I put the date my old car was officially sold (even though in the preceding weeks it was actually in a dealer's hands while they looked for a buyer)?

[LisaBr · Accepted solution]

Since the vehicle was no longer in your hands and your intention was to sell it, you will use the date that you no longer had control of the vehicle. 

The next questions are asking about the business use of the old vehicle from 01/01/2017 until the date you stopped using the vehicle.  Answer these questions with this in mind, you will add the other vehicle and expenses once you've completed this area.

3.  Next, TurboTax asks you about trading in your old vehicle and getting the new vehicle.  Depreciation will be figured here.

4.  Then, there's one more step.  Add a vehicle.  This is where your will add your new car and answer the questions relating to it's business miles from the time you began using it in 2017.

Once you've completed these three areas, all your vehicle expenses will be entered as well as depreciation and the information will be carried forward until next year.

[musician98]

Thanks, that helps a lot! I'm looking at the trade-in assumptions page and I'm not sure I understand what it means with "you gave up nothing more in the exchange, other than the old vehicle and cash" and "you received nothing more in the exchange, other than the new vehicle and cash". I paid for the new vehicle and when the old one was sold I received cash for that. Does that fit with those assumptions?

When it asks for the original purchase price of the new vehicle, should that be the total before tax and other fees?

[LisaBr]

Yes, you didn't receive any other property or bonus.  Just the value of your old car when sold.

[musician98]

For the purchase price of the new vehicle should I put the total before tax and fees? I also took out a loan to pay for a portion of it.

Where it asks for the old vehicle information, I'm not sure what the difference is between cost and AMT cost.

[LisaBr]

The cost for the new vehicle includes everything, including taxes, fees, loans, etc.  AMT is designed to keep wealthy taxpayers from using loopholes to avoid paying taxes.  For your purposes, the cost does not need to be adjusted for AMT unless you pay AMT taxes each year.  (They are additional taxes paid on top of your regular taxes.

[musician98]

Thanks for clarifying. I'm surprised it would include the taxes and fees, since those vary by location within the state (CA). I think it's confusing on TurboTax because the question in bold at the top of the page says "original purchase price" but then next to the box where you enter the amount it says "fair market value" which I've always understood to mean the base price before taxes/fees. I assume I would not include the interest on the loan but just the loan amount, right?

With the old vehicle, I drove it for a couple years before using it for business, so should I put in the amount it was probably worth when I did that (instead of the amount I originally paid)? I'm not sure how I would determine that amount since it was a couple years after I bought it and it was a fairly old car.

[LisaBr]

The cost of the new car is the bottom line cost to you.  However, if you are claiming the sales tax as a deduction on Schedule A, you wouldn't include that with the cost of the car.  The loan amount is money you are going to pay back so it is the cost of the car.  Too bad it's not a gift.
Yes, for the old vehicle, put the value at the time you started using it for business.  A fair estimate of the value is good.  I always look at Kelley's Blue Book to get an approximate value now.  They also have past year's value in their little books.  I'm sure it's on the internet, everything else is.

[musician98]

I'm not planning to claim the sales tax as a deduction, and I was just referring to the interest that's on top of the loan, not the actual loan.

I wasn't sure if KBB was considered an okay source which is why I asked. I'm not a tax expert which is why I like to doublecheck. Sorry!

[musician98]

I was reading some other threads related to this and came upon this one https://ttlc.intuit.com/questions/4221563 that suggests my situation might not be a trade-in/like-kind exchange. Technically there were two different transactions, since first I bought the new car from the private dealer and then when they sold my old car they paid me for it. Is that still considered a trade-in?