Question

If I sold my vehicle to a dealership and then used the money to lease a vehicle and purchase a second, how do you report those figures?

Forum|Forum|1 year ago
February 14, 2025
1 reply
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We traded our Truck to a dealership, used the funds to pay off the loan, and used the remaining funds to pay for a new vehicle's lease, and then used the remainder of that to purchase a second vehicle; how do you report this?

A

AmeliesUncle

Are any of these vehicles used for business? If not, nothing needs to be reported until you sold the vehicle at a gain.

R

ryshermsincAuthor

Thank you, I have more information.

We owned both vehicles, both for business.

We sold the first one, and it was a wash, we simply had Carvana pick it up and they paid off the loan to within a few dollars.

We sold the second vehicle to a dealership who then paid off the little left on the loan ($2k) applied part of it ($5k) to a new lease, and then we received a check for $15k which was used to purchase a second vehicle privately. Purchase price originally was $29.5k but we put $5k into it for hauling.

R

ryshermsincAuthor

Does that count as a loss?

To be clear; purchase price of vehicle #2 was $29.5k, we put $5k into it.

We brought it to a dealership who agreed to pay the remaining $2k loan, apply $5k to our new lease, and then we received a check for $15k to purchase the 2nd vehicle from a private party a week later.

So we received $22k for it when we originally paid $29.5k. Is that a $7.5k loss, and/or do we have to pay tax on this?