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Auto trade in - confused myself

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    Auto trade in - confused myself

    I've read the pages in TTB about 2 methods of figuring auto trade in and have calculated accordingly. However, I have another question that I cannot find addressed.

    If the client wants to, can he handle the old vehicle as being sold for the amount of the trade in - it is a loss using the basis less depreciation. And then start the depreciation on the new vehicle at the total purchase price.

    LT
    Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".

    #2
    If it is a 1031, then it can not be treated as a sale.

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      #3
      agreed....

      You do not have a choice.

      TTB, page 6-14 says:

      Mandatory. The like-kind exchange rules are mandatory. A taxpayer
      who sells property and buys similar property in two mutually
      dependent transactions, may have to treat the sale and
      purchase as a single nontaxable exchange unless the transactions
      are structured to avoid the like-kind exchange rules.

      Comment


        #4
        Thanks - this was the conclusion that I came to but thought that maybe I was overlooking something. It would have been to their benefit if it could be otherwise.

        Thanks again.
        LT
        Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".

        Comment


          #5
          Originally posted by Bees Knees View Post
          You do not have a choice.

          TTB, page 6-14 says:
          Bees - I have the TTB (separate business and 1040) and my page 6-14 is just about all about installment sales. Am I completely lost or is it possibly on a different page?

          Thanks for your help.
          LT
          Only in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".

          Comment


            #6
            Sale of Business Auto

            You can elect out of the 1031 exchange rule by attaching a statement indicating that you elect out under Reg. 1.168(i)-6(i) for each property.
            Confucius say:
            He who sits on tack is better off.

            Comment


              #7
              Originally posted by thomtax View Post
              Bees - I have the TTB (separate business and 1040) and my page 6-14 is just about all about installment sales. Am I completely lost or is it possibly on a different page?
              Sorry, the correct page reference is 6-17, second column.

              Comment


                #8
                Originally posted by RLymanC View Post
                You can elect out of the 1031 exchange rule by attaching a statement indicating that you elect out under Reg. 1.168(i)-6(i) for each property.

                It’s not an election out of the like kind exchange rules. Those rules are mandatory. Reg. Section 1.168(i)-6(i) is an election for depreciation purposes only to treat the trade-in as a tax-free disposition of the old car and purchase of a new car, using the adjusted basis of the old car as if it were used 100% for business, plus boot paid for the new car.

                That is still a like kind exchange. If it were an election out of the 1031 exchange rules, you would be required to pay tax on the trade in.
                Last edited by Bees Knees; 03-06-2008, 05:47 PM.

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