Tractor-Trailer trade in and depreciation

[David581]

I’m using TurboTax Premier and I traded in a tractor-trailer that was purchased in 2018 for another tractor-trailer that was purchased in 2024.  The tractor-trailer was used 100% for business.  Do I report the trade in amount received as a sale?

Also, a special depreciation allowance was taken for the first year of owning the 2018 tractor-trailer with the balance being depreciated over the next 3 years. I enter the amount of special depreciation allowance that was taken in 2018 but it also asks for prior depreciation that doesn’t include the special allowance depreciation taken.  Do I enter the amount of the depreciation that was taken over the 3 remaining years as Prior Depreciation?

[DavidD66]

Yes, you enter the depreciation that was taken annually (over three years in your case).  Based on the information you provided, the tractor-trailer would be fully depreciated and should have a cost basis of zero.  This will result in a gain equal to the amount you received as a trade-in allowance.   

[David581]

Thanks!