Meet Joyce.
She just decided to trade in her three-year-old vehicle for a shiny new SUV.
Sounds like a straightforward transaction, doesn’t it? … but it isn’t!
You see, Joyce operates her business as an S corporation and wants the corporation to reimburse her for depreciation and even bonus depreciation.
That’s when things get tricky.
You see, the Tax Cuts and Jobs Act (TCJA) made the trade-in of Joyce’s vehicle a taxable event.
This means it’s time for her (or her accountant!) to crunch some numbers and make some serious decisions.
We’ll show you how Joyce can deal with these challenges when you read my new article titled Tax Tips: Case Study: Trade-In on a New SUV—Reimbursement by Corporation.
Three ways our fact-filled article can help you:
- You’ll learn why Joyce has to make an important calculation. I’m talking about the gain-or-loss calculation on her trade-in. NOTE: Proprietorships, S corporations, and partnerships would also have to make the same gain-or-loss calculation. You’ll get all the details when you read the full article.
- We’ll show you how Joyce should calculate her original “basis” in the new vehicle. I’m talking about the vehicle she got in trade-in. Again, the original basis calculation must also be made by proprietorships, S corporations, and partnerships. Everything will be made crystal clear when you read the full article.
- We’ll explain the tough choices Joyce has to make. Now that Joyce has determined her business cost in this personally-owned SUV (the one she’s going to use for her corporate business), she has five choices to make. This involves deciding how her corporation will reimburse her. You’ll get the whole story when you read the full article.