A business trades in a vehicle for $28K lower than the NBV of the vehicle. Can this $28K loss be taken as a business loss or does it become part of the cost basis?

AnmarieA · ‎08-30-2023

This business is an 1120S and the initial vehicle was purchased in 2018 and then traded in 2022 for a newer vehicle. The trade in value given on the purchase was $21K and the NBV of this vehicle was $49K creating a loss of $28K. Does this loss become part of the cost basis of the new vehicle or can the business write off this loss in 2022?