Can you have a loss on a trade in? Client has traded 3 times. I know you use the adjusted basis and what to paid to boot is added to that.
Well this 2nd trade the Truck had a adjusted basis of 23400. He traded the truck for a van in April 05. Van Price 19700. He got 26359 for the truck trade in. After they payoff his loan of 20660 there was 6600 to deduct off the van. He had to pay $14000 for van. So the new basis for the van is $23400 + 14000 = 37400. Is that correct? He then sold the van in November 05 for 15000. So he has around a $15000 loss. Is this correct. Something doesn't feel right.
Well this 2nd trade the Truck had a adjusted basis of 23400. He traded the truck for a van in April 05. Van Price 19700. He got 26359 for the truck trade in. After they payoff his loan of 20660 there was 6600 to deduct off the van. He had to pay $14000 for van. So the new basis for the van is $23400 + 14000 = 37400. Is that correct? He then sold the van in November 05 for 15000. So he has around a $15000 loss. Is this correct. Something doesn't feel right.
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