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Hi and welcome to our site!To determine if you have any gain on the disposition of your car - we need to know your basis.The basis is mainly your purchased price.The purchase price should be adjusted by some items, for instance-- purchase expenses are added to the basis-- if you had any improvements - the cost must be added to the basis.-- if the car was used for business - the basis must be reduced by depreciationYour gain on disposition will be calculated as $59k (selling price) MINUS (adjusted basis).Your loan amount and equity you had at that time are not relevant for determination of your gain or loss on that trade-in transaction. |If you provide additional information about your basis - I will help you to calculate possible gain or loss on that disposition.
I used the incorrect terminology. I shouldn't have said tax credit.
I meant the difference on taxes I did not owe since I traded my vehicle.
IE: I had a $59k car, traded it for a $79k car, I only owe taxes on the new money, the $20k
That make better sense? Sorry if I was not more clear... having a hard time putting to words what it is I am trying to say
I was told that since the dealer gave me my equity back, that I was not entitled to any 'credit' when purchasing the new vehicle. That I essentially 'sold' my car to the dealer.
Yes - now we are talking about sales tax liability - not income tax liability.You are correct - when you trade-in the car - you will pay sales tax only on the difference in values between the old car and a new car.However - in order to take advantage of that - that should be one trade-in transaction.If you sold your car and purchased a new car in two separate transaction son different dates - that would not qualify for trade-in regardless if the car was sold to the same dealer or to a different dealer.
I see, so a 5 month delay, no matter what the circumstance, would preclude me from the sales tax exception?
Dang. I was hoping he was incorrect.
Unfortunately - these are two separate transactions - see here - http://dor.myflorida.com/dor/forms/2009/gt800030.pdf
A trade-in that the dealer intends to resell lowers the sales price if the sale and trade occur inone transaction. A dealer’s discount reduces the selling price of the vehicle at the moment ofsale.Thus - to qualify for reduced taxable sale price - that must be ONE transaction recorded on the same day. Sorry.
Got it. Thanks....