Bees Knees, Form 8824 LK Exchange

[taxjungle]

Hello BK & other LK Exchange experts. Will you please help me with this one?

TP exchanged 2 vehicles used as Taxicabs for another vehicle (Taxi) during 2007.Here are the facts:

OLD Vehicles:
Ford Winstar cost $22,513 in 2002. Depreciation =$18,944 (100% busn = $19,514)
Nissan Windstar cost $18,704 in 2006. Depre = $4,612 (100% busn = $5,360)
Also in the trade was an Old Mitsubishi (with blown-out motor) which they allowed $500 trade in value (but on the papers was shown as a down payment).

NEW Vehicle:
Land Rover: Cash Sales Price = $39,156
Cash Down Pmt = 500
Trade-in Value for Winstar &
the Nissan = $17,468. Less Owing $19,085. Net (negative) = $1,617.

Unpaid Balance of Cash Sale Price = $38,656.
Cost of exchange, title, registration, etc. = $218.
Total Other Charges & Amts Paid to Others on Tps Behalf = $1,835
Amt Financed Principal Balance = $40,491.

PLEASE help me to complete Form 8824. I have tried it several different ways and now I'm balled up, and here it is so close to the tax filing deadline! THANK YOU for considering this, it's really appreciated!

[Roland Slugg]

I was going to help you, but your numbers don't seem to add-up. Also what are the two different amounts you listed for depreciation for each vehicle? That's not clear either.

What you described is a 3-for-1 exchange, assuming the old Mitsubishi was a business vehicle.

[taxmandan]

Haven't worked it out on the form yet, but that sure is an odd mix of vehicles for a taxi service, a Land Rover?

[DTS]

taxjungle...

look at this past discussion where Roland and Bees pitched in and solved this problem. It's a 3-page thread and it may help you in your situation.

http://www.thetaxbook.com/forums/showthread.php?t=2124&highlight=auto

[S T]

See DTS post

Yes, see that prior thread that DTS posted, I was involved in that discussion as I had a client that had a negative trade in balance.

Your issue is that there is more than one vehicle, so not sure how that works on LKE and I would probably have an issue in working that through my computer system.

But the prior thread does address the negative trade in. Maybe if you print it out and then place your numbers to the side, all will fall in place.

I am sure more people will post on this issue.

Sandy

[taxjungle]

Bees Knees, Form 8824 Exchange

I was going to help you, but your numbers don't seem to add-up. Also what are the two different amounts you listed for depreciation for each vehicle? That's not clear either.

What you described is a 3-for-1 exchange, assuming the old Mitsubishi was a business vehicle.

Thank you for your response. The 2 different amounts l listed for depre for each veh is:
Winstar = $18,944 which includes Spec Depre.
Nissan = $4,612
Yes, the Mitsubishi had been a busn veh until the engine blew-up in 2005. It has been stored ever since 2005.

I hope this helps. I don't think my software is going to be able to handle this exchange well. Taxpayer is going to paper file, so I may just do the worksheets and force some calculations if needed. (I really don't like to do this though). Thanks again.