Which amount to use for "total cash and/or loan amount paid with the trade in?"

[randm09]

I have been stuck on this for a while and read all the previous articles but cannot find an answer that gives me what I need so a specific answer would be much appreciated. 

I traded my 1 year old truck in 2022 on a new SUV.  Both were used in my business for less than 50%.    I need to know which figure to use for the car and truck worksheet, line 77 (entire basis of replacement or excess basis).  In the easy step when I said the new car was part of a trade in, it asks for the "total cash and/or loan amount paid with the trade in."

I received 36500 for my truck, 28200 went to payoff my loan, leaving me 8300 down towards the SUV which cost 35169.  So which of those numbers do I put?  It doesn't seem to impact my tax due but does change the depreciation figures dramatically so I want to get it right for the future.

Thanks

[Mike9241]

you sold your old truck for 36500

35169 for the new SUV  - i'm assuming by the numbers you provided you either had to come up with cash of 26869, a new loan for 26869, or some combination totaling 26869 for the new SUV (35169-8300)

[randm09]

yes.  I took out a loan for the rest

[randm09]

Did you happen to know the answer to which number I use there?

[Critter-3]

The figures you need were already provided ... you have a sale of the old vehicle and a separate purchase of the new vehicle.  These are separate situations and can no longer be combined. 

[randm09]

Thanks for your reply.  I understand the transactions are now considered separate but I still don't know which number to use.  Does that mean that in line 77 of the worksheet I would put the total purchase price of the new vehicle 35169?

[randm09]

Or the trade in amount applied 8300?

[Mike9241]

there should be a gross amount they crredited you for the trade-in . that's what to used.  the gross amount would then be reduced by any payoff but has no effect on tax basis if the new item 

ecample

sale price new item   $50000 - that's its tax basis

less trade in value   $20000   that's the sale price of the old item (assume cost $30000 and depreciation $15000

add loan payoff   $10000, no effect on anything

cash paid $40000

if you were making bookkeeping entries

new item debit                               $50000

loan payoff debit                            $10000

old item depreciation  debit        $15000

old item credit                                                    $30000

cash credit                                                           $40000

taxable gain  credit                                            $   5000 (trade in value $20 - cost $30 + depreciation $15)

 (

[randm09]

Thanks for your response but I still don't understand with your numbers.  If I'm supposed to put in the gross sales price of the old vehicle that was $36500.  Turbotax doesn't like it however saying its too much basis probably bc I received more than I paid for the new vehicle $35169.  So for now I have put in $8300 which is the amount I was credited for after the loan payoff of the old vehicle.  Any thoughts with my numbers?

When I enter the business info as part of the sale of business property it comes out as a loss and is erased.