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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?
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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.
Thanks!
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