Question

Trade in of business vehicle (self employed)

Forum|Forum|3 years ago
March 18, 2023
1 reply
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I traded in a truck on another truck. I put in the trade in value as the sale price ($49,000) and I put in the original cost of the truck ($61,000). It tells me I have a $49,000 gain and is adding about $8,000 to my tax bill. How can I have a gain of $49,000 when I had to spend money to get the truck in the first place. It wasn't free. I did not make $49,000 income on this transaction.

TurboTax Home & Biz Windows

T

ThomasM125

It is possible that you had depreciated the vehicle, most likely bonus depreciation for the full cost of it in the year you entered it in TurboTax, so the depreciation would reduce the cost of the vehicle so most or all of the sale price would be reported as a gain.

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