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In 2008 I have a vehicle I purchased for $29,989.09. Trade

In 2008 I have a...
In 2008 I have a vehicle I purchased for $29,989.09. Trade in was allowed at $13000.00. Less Prior Credit or Lease Balance of $13,882.96. Net trade in -882.96. The old vehicle cost $34, 823.00. Depreciation taken in prior years was $12,285.00. How would I figure the basis in the new vehicle?
JB
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Customer reply replied 8 years ago
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Answered in 4 days by:
9/9/2009
MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,342
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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DearCustomer-

 

Your basis in the new vehicle is $37527.09. The adjusted basis of your old vehicle $22,538 ($34,823 - $12,285) plus the cash paid for the new vehicle $16,989.09 ($29,989.09 - $13,000). I have provided links to Form 8824 & instructions and IRS Publications 551 & 544.

 

http://www.irs.gov/pub/irs-pdf/f8824.pdf

 

http://www.irs.gov/pub/irs-pdf/i8824.pdf

 

See page 7: http://www.irs.gov/pub/irs-pdf/p551.pdf

 

See page 11: http://www.irs.gov/pub/irs-pdf/p544.pdf

 

 

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Customer reply replied 8 years ago
In the above question/answer, shouldn't the adjusted basis in the new vehicle be $39527.00?

Sorry, wasn't quite awake yet. Yes, it should be $39,527.09.

MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,342
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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