Article Date:
September 2020


Word Count:
1473

 

 

Case Study: Trade-In on a New SUV—Reimbursement by Corporation


As you may remember from Tax Reform Eliminates Tax Benefits of Business Vehicle Trade-Ins, the Tax Cuts and Jobs Act (TCJA) made the trade-in of your vehicle on a replacement vehicle a taxable event.

 

In this article, we will show you how to make your gain or loss calculation on a trade-in, regardless of operating entity. In other words, the proprietorship, the S corporation, the C corporation, and the partnership would make the trade-in gain or loss calculation, as shown in this article.

 

We’ll also show you how to calculate your original basis in the new vehicle that you acquired using the trade-in. The original basis is the same for the proprietorship, the S corporation, the C corporation, and the partnership.

 

But if you operate as a corporation and own the vehicle personally, you may want to have the corporation reimburse you for depreciation, even bonus depreciation, as we ... Log in to view full article.

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