Traded vehicles, aaaarrrrgggghhhhhhh.

[Safire]

Heavy Duty truck placed in service 2001, traded in 2003, Fully expensed using Section 179.

Do I have to leave this on the depreciation schedule until after 2007?
Or can I just delete it?

[jainen]

do either

You can do either, since it is a 1031 exchange. Continue to track the exchange basis (zero, with related Section 179 deductions) for the remainder of its life, and start a new asset to depreciate transaction costs and additional value paid or financed for the new vehicle. Or, subtract the deferred gain from the cost of new vehicle, and use that as a new single asset.

In your case the total depreciation should be the same either way, so the second method is simpler after you do the math to set it up.

[OldJack]

Or, subtract the deferred gain from the cost of new vehicle, and use that as a new single asset.

Its the NBV (zero) that is added to the basis of the new asset with the deferred gain only decreasing the new vehicle basis for purposes of code §179 deduction, but not decreased for regular depreciation.

[Safire]

Thanks guys.