Based on discussions with thousands of taxpayers over the past decade, we found that the tax law has been unintentionally hiding deductions from taxpayers who trade in an existing owned vehicle on the lease of a business vehicle. If you are a taxpayer who traded in a car you owned on one you now lease, how would you like to find those hidden deductions?
The hiding place for the deductions is the mistaken belief that a trade-in on a lease is a tax-deferred like-kind exchange. The reality: the trade-in on a lease is not a trade at all.
For tax purposes, the trade-in of a vehicle on a lease is the cash sale of the trade-in for its fair market value. ... Log in to view full article.