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Trading a vehicle for a truck...how is that handled tax wise?

justmjc

LawnSite Senior Member
Location
michigan
I have a 94 mustang for trade in return for a 1996 dodge 2500, which is my brother in laws vehicle. I'd like to take the $6500 he wants for it, and use that as a tax write off for the business. But, if I trade, can I still write that off? Should I create a bill of sale, even though no money will change hands? Is it ligit or not? Any suggestions how I can obtain the write off?
 

twins_lawn_care

LawnSite Senior Member
I would think if you are trading, it is the equivalent as purchasing it for the $6500 like you stated. YOu can get a bill of sale for it, and he your's, handle the taxes appropriately from there out.
i am not too familiar with this, so take my advice for what you paid for it.
Good luck, and let us know what you find out.
 

missytheaccountant

LawnSite Member
Location
Bama
If it is your personal vehicle, there will be no tax write off. Since gains on personal property aren't taxed, then losses aren't as well. However, if your business is a S-corp, LLC, etc. then it would be treated as a like-kind exchange and the gain/loss would roll over into the basis for the new vehicle. Sorry, but without more details, it doesn't seem like to me that you will be able to count a loss.
 
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