QUIKAG

You're getting warm. Make it TWO separate transactions.

MaxGeek

Will two separate transactions be better?

example:
$20k vehicle with $10k vehicle trade in = pay tax for $10k vehicle
two separate transactions = pay tax for $20k vehicle

Elistan

I thought the point was to avoid paying income tax on the depreciation of the vehicle? Given that income tax is 28% and sales tax is in the 6% to 8% range, seems like saving on the income side, even at the expense of the sales side, is a good thing.

RossoS2K

He said...
We took 100% of the truck in 03. Done deal.
Treat the trade as a sale. Then purchase the new truck.

QUIKAG

Problem is, if you do a trade, it's a like-kind exchange. He CANNOT decide to treat the trade as a sale. It is not up for debate. If you trade a vehicle in for a new one, it's a 1031 exchange. If you sell the truck and buy another in a separate transaction, then you're okay.

Now, your accountant can treat it however he wants, but it will not hold up under audit. Of course, chances of audit are slim.

Also, you could have the dealership treat it as two separate and distinct transactions, but provide an 'in and out' deal to give you the sales tax benefit of the 'sold' vehicle.

It's a difficult area to deal in and I can understand your accountant wanting to "treat" the trade as a sale, but it is not correct. Not to say people don't do it all the time, but it's still not accurate and will not hold up under an IRS audit.

RossoS2K

I decided to lease it.
its stupid cheap.
49,000$ truck for 400ish a month for 3 years. no money down...
how can I complain about that?!
thanks for the help

QUIKAG

Congrats!! Sounds like a great deal.

RossoS2K

we had almost 5K in GM card earnings and a mailer that was good for either 1500$ or $2500 towards 20" wheels...

BPUKiller

How the hell? Wow I'm not in the market for a truck. If I'm able to sell a house of mine I might use some spare cash to get a STS-V. I never had a GM product, even though I have a old C10 sitting in front of a property I own that use to be my gramps. Does that qualify for another rebate ? What other rebates can I apply besides the employee discount on a CTS-V?

Sam