Trading a vehicle for a is that handled tax wise?

Discussion in 'Business Operations' started by justmjc, Mar 21, 2004.

  1. justmjc

    justmjc LawnSite Senior Member
    Messages: 261

    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?
  2. twins_lawn_care

    twins_lawn_care LawnSite Senior Member
    Messages: 932

    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.
  3. specialtylc

    specialtylc LawnSite Bronze Member
    Messages: 1,656

    Yes you can write it off. At tax time just put it your schedule of depreciation.
  4. missytheaccountant

    missytheaccountant LawnSite Member
    from Bama
    Messages: 45

    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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