Solved: When buying new biz van with a trade in, TT asks for Total Cash/Loan Amt plus Paid Amt. Was told that new deprec basis is Paid Amt (inc trade) Why does TT ask for both?
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When buying new biz van with a trade in, TT asks for Total Cash/Loan Amt plus Paid Amt. Was told that new deprec basis is Paid Amt (inc trade) Why does TT ask for both?

 
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When buying new biz van with a trade in, TT asks for Total Cash/Loan Amt plus Paid Amt. Was told that new deprec basis is Paid Amt (inc trade) Why does TT ask for both?

The program is trying to split up the price of the new vehicle and the selling (trade-in) price of the old. 

Yes, the basis is the total purchase price of the new vehicle, regardless of the trade-in. 

The loss or gain on the older vehicle will also need to be computed, and that is based on the cost, depreciation taken and trade-in value given. 

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Level 4

When buying new biz van with a trade in, TT asks for Total Cash/Loan Amt plus Paid Amt. Was told that new deprec basis is Paid Amt (inc trade) Why does TT ask for both?

The program is trying to split up the price of the new vehicle and the selling (trade-in) price of the old. 

Yes, the basis is the total purchase price of the new vehicle, regardless of the trade-in. 

The loss or gain on the older vehicle will also need to be computed, and that is based on the cost, depreciation taken and trade-in value given. 

View solution in original post

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