KEYWEST_RICKS Posted March 25, 2014 Report Share Posted March 25, 2014 a fully depreciated business truck was traded in on a new leased vehicle. the dealership gave them $10,000 trade in credit against the new 36 month lease. the lease does not have a bargain purchase at the end so therefore is not a capital lease am i correct that this would be a taxable event and not a tax free 1031 exchange since they are not actually receiving replacement property. and therefore, unfortunately, they would have sold the fully depreciated truck for 10K and must recognize gain on this transaction. additionally the new truck is a lease and the lease payments will be deducted as paid instead of having accelarated depreciation on the cost of the truck am i wrong on this??? Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 25, 2014 Report Share Posted March 25, 2014 Isn't 1031 exchange for automobile used when you have a fleet of trucks or like rental cars? Quote Link to comment Share on other sites More sharing options...
imjulier Posted March 25, 2014 Report Share Posted March 25, 2014 If one car was traded in for another a 1031 exchange would be used. trading in for a lease, I don't think so. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 25, 2014 Report Share Posted March 25, 2014 I didn't know they could be called 1031 exchanged for one vehicle, I always thought it was a trade-in and you would reduce the cost basis of the new vehicle by the trade-in value. Learned something new today. I have always used 4797 in the past. Quote Link to comment Share on other sites More sharing options...
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