Discussion:Gain on trade-in?

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Lhhesscpa (talk|edits) said:

13 June 2007
The following was posted to my user talk page. I think it will be more useful as a new discussion topic. -- Larry Hess, CPA | Albuquerque, NM | Talk to me


There is a truck the company has fully depr $20,498.25 for 5 yr from 1/2002 to 12/2006. it was traded in value $10,500 to purchase another truck net of all fees of $37,685 and have a manufacturer rebate $3,845. Do I record the $10,500 as a gain since it is fully depr and record the new truck at $33,839.75?

new truck total cash price 37,233.25 fees 451.75 trade in old truck (10,500.00) manufacturer rebate (3,845.00) total paid after trade in 23,340.00

thank you User:Newacct 16:26, 13 June 2007 (CDT)

Michaelstar (talk|edits) said:

13 June 2007
This is a trade in - not a sale. Record the basis of the new truck at amount paid - $23,340. No depreciation recapture of the old truck - YET. Once you sell this truck (assuming you sell it) you will recapture any depreciation at that time. If you trade this new one in, in five years - it just keeps on rolling.....

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