Truck Trade In

[Taxman]

I have a client that traded in a truck for a new truck. The adjusted basis in the old truck is 0 and the cost of the new truck was $72,610. The truck is used 100% for business use and owned by an S-Corp. The trade in value the dealer gave for the old truck was $23,500 leaving a balance of $49,110 which the S-Corp took out a 3 year loan for. What would be the basis in the new truck would it be $49,110 or $72,610?

[Bucky]

$49,110 or $49,110 plus sales tax or other expense involved with transaction.

[winnie]

trade in

Look in TTB pag 10-9 for an excellent example of your basis for like kind exchange on business vehicle.