steps to add a new truck with old truck trade in will loan due

[karen388]

my client traded a truck on the books with a loan for a newer truck need the entries in 1065 tax return

[Terry53029]

Sold old one, and bought new one. Separate transactions. Like kind exchange not available any longer

[karen388]

but old truck was a trade in for new truck with value

[Camp1040]

Read the above reply again. The paperwork from the dealership will have the amount of the trade in allowance documented on the bill of sale.

No like kind exchange except real property under TCJA.

[jeffmcpa2010]

The dealer may call it a trade, but for tax purposes it is a sale for the trade value and a new purchase for the contract amount of the new vehicle.

[karen388]

would the loan payoff be an expense of the sale

[IRonMaN]

"No like kind exchange except real property under TCJA"

But it was a real truck. 😜

[IRonMaN]

"would the loan payoff be an expense of the sale"

Nope

[jeffmcpa2010]

No. The loan payoff is a loan payoff. You use the Gross trade in as the sale price of the old truck. 

Net Trade in, plus boot(now there is an old term)(Boot is additional cash and/or new amount financed) is the purchase price of the new truck.

[PATAX]

Loan proceeds are not income , and therefore principal payments on a loan are not expensed....

[PATAX]

Speaking of so-called "deducting a loan as an expense", it always amazes me when someone goes to sell their business, and they say "I didn't make that much money because I had to pay off all these loans". When you tell them the truth, they look at you like you are from another planet.