Article Date:
March 2015


Word Count:
1274

 

 

Stop Taxes before They Happen by Shrewdly Planning the Trade-In or Sale of Your Business Vehicle


Estimated tax tip savings. Use these strategies to easily avoid $2,000 to $8,000 in unnecessary taxes when you sell your business car or truck. As you’ll see, your exact tax savings will vary depending on certain facts.

 

Editor’s Update: 1031 exchanges for vehicles and equipment were allowed prior to January 1, 2018. See Tax Reform Eliminates Tax Benefits of Business Vehicle Trade-Ins.

 

When you sell your business car or truck, you could create thousands of dollars of extra tax—or create thousands of dollars of tax deductions. Each situation varies. This means you have to know some simple facts about your car or truck to plan correctly.

 

With the right tax planning, you can either

 

·

escape tax using a like-kind exchange if you owe tax on the transaction or

·

take extra tax deductions if you find that you would have a deductible tax loss if you sold the vehicle to a third party.

 

Back to the Basis

 

Before you can determine whether to escape tax or take extra tax deductions, you have to know two ... Log in to view full article.

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