what are they wanting on the cash, or loan amount, paid with trade-in? is it the new loan amount or what was paid off on the trade

  • What if the vehicle is paid off and you don't have the original loan paperwork? Wasn't SE at the time it was paid off, so didn't keep it.
From my conversation with TurboTax Support today, I offer these suggestions:
"Cash, or loan amount (or both), paid with trade-in" is used to calculate the basis in the new vehicle in a like-kind exchange.

It is the sum of:
Cash Downpayment
+ Old Loan Payoff Amount that was added to the new loan
+ Trade In Allowance listed on the Purchase Contract

If you did not own the car that was used for the trade in (i.e. it was a gift), you may include the amount paid off with the trade-in.
(I am not a tax professional, this is not tax advice.)
  • We paid cash for the new vehicle(no loan) and they allowed us 1,000 on the trade in, there was nothing owed on the old vehicle. So is the basis going to be the the cash we paid plus the 1,000 for the old vehicle? That means the basis will end up being the total cost !
I THINK it would be something like this and I'll use the example of my transaction: took in a 2009 Malibu to trade on 2011 Sorento. Dealership gave me $17,000 for the Malibu while I only owed $12,500. *I think they do this as a place to get you the deal you want and they can easily write off any losses on a trade-if that makes sense. No one is going to actually give you that much more than a trade is worth if not* So what that did was (in addition to other available rebates and such) take $4,500 off the cost of the Sorento. So I THINK what they want there is the amount financed or that you paid in cash besides that $4,500 that got that dealership paid. I financed $23,500 before the document fee and tax, tag, and title which would be the total amount financed if you added those in. It seems to me that the total amount financed (plus any cash down payment) would be what they want BUT when I put that they said it was "too high". I have no idea what else they could possibly mean. Sometimes I hate TT. Hate it with all my might.

If you don't have your paperwork and went through a large dealership they will have it on file most likely. If you absolutely cannot access this info...well...I don't know. How the heck is anyone supposed to think they have to keep that after the vehicle is paid off and especially if it was paid off before you put it into service.

I've said before, TT really needs to word things simpler and give examples since this is supposed to be helping us to do it ourselves. It's like you have to go to HR Block, sit through hours of them doing your taxes and try to ask what figures they are asking for in those sections and then say OK thanks but I'm not filing with you. Then go home and jump back on TT. lol
    yeah, I would like to know as well...
    • Why aren't Turbo Tax answering questions ?
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