Traded vehicle for new one

[RogerMR]

I traded my truck last year for a new one.  turbo tax used to have a place to enter all the information.  Now it is treating it like I sold the truck and wants to know the sales price, cost of vehicle and basis for my gain/ loss.  Traded value was 40000, I paid 42 for it on trade and no idea on how to figure out the basis for gain/loss.  I took mileage deductions the whole time I owned this truck

[KrisD15]

Yes

a trade-in could be treated as a "like-kind exchange" but that is no longer available. 

1031 Like-Kind Exchange is now limited to real estate only. 

"Before passage of the Tax Cuts and Jobs Act (TCJA) in December 2017, some exchanges of personal property—such as franchise licenses, aircraft, and equipment—qualified for a 1031 exchange. Now, only real property (or real estate) as defined in Section 1031 qualifies."

LINK

[RogerMR]

How do I figure my gain/loss on the vehicle?

[RaifH]

If you took the standard mileage deduction on the truck while you used it in business, a portion of the deduction is considered depreciation on the vehicle:

Year(s)     Depreciation   Rate per Mile  

2021           $0.26  

2020             0.27  

2019             0.26  

2017–2018  0.25  

2015–2016  0.24  

2014             0.22  

2012–2013  0.23  

2011            0.22  

2010            0.23  

2008–2009  0.21  

2007             0.19  

2005–2006   0.17

Your cost basis for the old truck is the amount you originally paid, including taxes. This is then reduced by the depreciation you took over the years by using the standard mileage rate.

The sales price you got from the trade-in is what you received as the trade-in value for the old vehicle when you purchased the new truck.

If you bought the old truck for $42,000, depreciated it $15,000 based on the miles driven, and then received $40,000 as trade-in value, you would have a $13,000 gain. Your basis is $42 - 15 and your proceeds are 40. This would be taxed as recaptured depreciation which is ordinary income, as opposed to a capital gain. 

The basis of your new vehicle would be the trade-in value of the old one plus whatever additional cash you have to pay. This is all assuming that you used the vehicle exclusively for business and did not take any accelerated depreciation over the years. 

[frankwjohnson2]

What if you only use the vehicle about 50% on average for business use. Do I still use the full amount for every entry or do I multiply every about by 50%?

[AmyC]

When you are entering mileage. the percent of business miles out of total miles will let the program know how to allocate percentages. You can enter the full amount of expenses.

@frankwjohnson2

[RogerMR]

Ok, I have the federal depreciation figured out now it will not let me go forward without figuring Iowa previous depreciation.  How do I do that please