My small-biz Schedule C trucker (one horse-operation/no employees) sends me his 1099s and a list of his expenses every year. This time he lists a "new" (older model) truck purchased for $15K -- nothing about selling the old one or hiring a driver for a second truck. Soooo....of course, this begs the question of: "What about ole Betsy?" He lives out of town and I hate to call 'cause his caller ID setup is a stupefying maze to negotiate plus...it's hard to get a word in edgewise. I figure surely he's still got it -- just parked and not driving it 'til he needs it again. But -- can't ignore it -- nothin' to do but bite the bullet.
Do you still have your old truck?
No, I sold it for $34,000.
This year? In '06?
No. Last year. In '05. Why? Is that a problem?
Yes. Your basis is $10,000.
Well, it's okay. My brother-in-law, Sonny, he drives truck too and he takes this really great tax magazine for truckers. He said that as long I bought another truck, then I'm okay, 'cause there's no tax on "look-alike EX--changes." That's right, ain't it?
You're talking about the $15,000 truck purchase on your list?
Naw; not that one. I bought another'n besides that. For $25,000.
This year? In '06?
No. Last year. In '05. Why? Is that a problem?
Never mind. Listen, when were you planning on telling me all this stuff?
Well, since sellin' the old truck was just an in-and-out deal, me and Sonny figured there wasn't any point in puttin' it down and botherin' you about it. Wouldn't you just have to fix up some extra forms for nothin' and then have to charge me more for doin' my taxes?
And the $25,000 truck?
No, just let that one alone. I'm don't want to take any expenses on it this year. You remember one time you told me about depreciation -- how you spread out the cost of a truck over a lot of years instead of taking it off all at once? Well, I had a pretty bad year and I don't think I'll owe anything, so I'm just gonna save that depreciation for next year, or maybe even later -- we'll just have to wait and see how it all comes out. Listen, what did you mean my whadda-you-call-it in the old truck is ten thousand dollars?
It means you have a gain of $24,000.
Sonny was wrong? Oh well; never mind anyway. We don't have to worry about it. Shoot, I still owed the bank $25,000 on it and had to pay them off, so we've got a thousand dollars to spare.
........
Do you still have your old truck?
No, I sold it for $34,000.
This year? In '06?
No. Last year. In '05. Why? Is that a problem?
Yes. Your basis is $10,000.
Well, it's okay. My brother-in-law, Sonny, he drives truck too and he takes this really great tax magazine for truckers. He said that as long I bought another truck, then I'm okay, 'cause there's no tax on "look-alike EX--changes." That's right, ain't it?
You're talking about the $15,000 truck purchase on your list?
Naw; not that one. I bought another'n besides that. For $25,000.
This year? In '06?
No. Last year. In '05. Why? Is that a problem?
Never mind. Listen, when were you planning on telling me all this stuff?
Well, since sellin' the old truck was just an in-and-out deal, me and Sonny figured there wasn't any point in puttin' it down and botherin' you about it. Wouldn't you just have to fix up some extra forms for nothin' and then have to charge me more for doin' my taxes?
And the $25,000 truck?
No, just let that one alone. I'm don't want to take any expenses on it this year. You remember one time you told me about depreciation -- how you spread out the cost of a truck over a lot of years instead of taking it off all at once? Well, I had a pretty bad year and I don't think I'll owe anything, so I'm just gonna save that depreciation for next year, or maybe even later -- we'll just have to wait and see how it all comes out. Listen, what did you mean my whadda-you-call-it in the old truck is ten thousand dollars?
It means you have a gain of $24,000.
Sonny was wrong? Oh well; never mind anyway. We don't have to worry about it. Shoot, I still owed the bank $25,000 on it and had to pay them off, so we've got a thousand dollars to spare.
........
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