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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 03-05-2013, 06:39 PM
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frugalmama4 frugalmama4 is offline
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Default Tom Copeland...How To Dispose An Vehicle??

Hello,

Ok, I' m using the 2012 tax workbook...and I'm a little confused on how to claim deprecation on a new vehicle purchased in 2012. I'm using Turbo Tax desk top version "allows me to see the forms"

Tax book pg 197 "Selling a Vehicle with a trade-in"

New Vehicle information: purchase new in 2012 Light SUV Under 6000lbs. The old vehicle was traded-in to get the new one.

What I'm doing: traded a vehicle (100% business use) "standard mileage rate method claimed" for a (100% business use) "actual business rate method" If I'm understanding the example in the workbook correctly "this would not be a like-kind exchange...right? I would dispose of the old vehicle and then pick up the new vehicle...right?

TT does ask rather I trade-in the old auto for the new one and immediately started using it for business. "If I check yes it goes on to ask about prior deprecation and new basis deprecation for new auto.

If I enter it as a like-kind exchange TT prepares forms (8824 & 4797)...I don't think this is correct in this situation.??/


After reading and re-reading the tax work book I'm unsure how to compete this transaction.

Thanks all for your help!
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Old 03-06-2013, 08:23 AM
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TomCopeland TomCopeland is online now
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Location: St. Paul, Minnesota
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Default Sale of car

Quote:
Originally Posted by frugalmama4 View Post
Hello,

Ok, I' m using the 2012 tax workbook...and I'm a little confused on how to claim deprecation on a new vehicle purchased in 2012. I'm using Turbo Tax desk top version "allows me to see the forms"

Tax book pg 197 "Selling a Vehicle with a trade-in"

New Vehicle information: purchase new in 2012 Light SUV Under 6000lbs. The old vehicle was traded-in to get the new one.

What I'm doing: traded a vehicle (100% business use) "standard mileage rate method claimed" for a (100% business use) "actual business rate method" If I'm understanding the example in the workbook correctly "this would not be a like-kind exchange...right? I would dispose of the old vehicle and then pick up the new vehicle...right?

TT does ask rather I trade-in the old auto for the new one and immediately started using it for business. "If I check yes it goes on to ask about prior deprecation and new basis deprecation for new auto.

If I enter it as a like-kind exchange TT prepares forms (8824 & 4797)...I don't think this is correct in this situation.??/


After reading and re-reading the tax work book I'm unsure how to compete this transaction.

Thanks all for your help!
This is a like kind exchange. The basis of the new vehicle is the amount you paid for the new vehicle without taking into account the value of the old vehicle you traded in.
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Old 03-06-2013, 08:43 AM
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frugalmama4 frugalmama4 is offline
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Default Thanks Tom...one last thing

Got it, TT tax had automatically calculated the new auto deprecation basis; however those numbers will only be needed if I sell the new auto with out trading it in....right??

I'm so sorry I drive my self crazy trying to figure out how all he numbers come together.

Thanks for your patients.
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Old 03-06-2013, 03:14 PM
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TomCopeland TomCopeland is online now
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Location: St. Paul, Minnesota
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Default Car

Quote:
Originally Posted by frugalmama4 View Post
Got it, TT tax had automatically calculated the new auto deprecation basis; however those numbers will only be needed if I sell the new auto with out trading it in....right??

I'm so sorry I drive my self crazy trying to figure out how all he numbers come together.

Thanks for your patients.
Don't worry about the depreciation basis as it will only be an issue if you sell the car or it's wrecked.
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