Question

I operate my business as an S corporation, and the corporation reimburses me for use of my personal vehicle. I bought the vehicle in 2022, and now I am considering trading it.

What happens when I trade?

Answer

Example 1. You purchased the vehicle for $40,000 and had the corporation reimburse you $40,000 for bonus depreciation. You now trade in the vehicle for a $45,000 vehicle. The dealer gives you $20,000 for the trade-in.

You have a $20,000 gain on the trade ... Log in to view full article.