Election to treat trade in as disposed

[cpabsd]

I need to make an election to treat the trade in of a vehicle as a tax-free disposition. I believe it is election 1.168(i)-6(i). How/where do I make this election in ATX? I have not been able to find it. I've looked in elections and cannot locate. Please help!!

[kcjenkins]

Don't have time to look it up now, but I do know you can always write your own election form as one option.

[jainen]

>>I need to make an election to treat the trade in of a vehicle as a tax-free disposition<<

Section 1031 treatment is mandatory in all cases; you never have a choice about it. The election you cite is only for MACRS property, so it isn't available if you used standard mileage rate. The "disposition" only refers to what you do with the depreciation schedule, not to the vehicle itself or to the exchange transaction. I don't know how ATX handles it and I don't care. My standard advice for everything about like-kind exchange is always do it all by hand and just override as necessary to copy it into the software.

The way this election works is you combine the exchange basis plus any new cost basis into a single new depreciation schedule over the entire life of the new vehicle. The advantage of that is simplified accounting. Otherwise you have to track two "assets," the exchange basis over the remaining life of the old vehicle, and any new cost basis over the new life. That gives a faster write-off, but even faster would be to maintain the shorter schedule for the exchange basis while taking a 179 deduction for any new cost basis instead.

Anyway, your election is described on page 10 of the Instructions for Form 4562. Good luck making sense of it.

[cpabsd]

Thank you!

I had figured out the dollar amounts already just needed the election. I ended up creating my own within the election form.