Tax Reduction Letter - Upside Down Trade of SUV

Article Date:

September 2006

Word Count:

265

Upside Down Trade of SUV

In 2003, I bought a $35,330 Chevy Tahoe and expensed $33,564, my 95% business use percentage. I was upside down on the Tahoe this past month when I traded it for a new Tahoe. The dealer gave me a trade-in allowance of $10,500 and paid off my $21,700 remaining loan balance. The cost of the new Tahoe was $41,900. What is my basis in the new Tahoe after this trade? (F.M., Mt. Pleasant, SC)

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