We have to have a heavy duty truck for our business. The current truck was purchased in 2022 for $90k at 4.75% interest. Best rate we could find at the time and highest we’ve ever paid, horrible. Balance on the truck is $50k. Payments are $1400. Considering the new deduction, is there any benefit to us selling this truck for $65-70k, and buying a new truck before the end of the year? Stats would be similar, but rate would be slightly better. I completely understand that the deductions aren’t beneficial to “buy a vehicle just to buy a vehicle”, and if it’s not beneficial for our business I’m happy to save myself the trouble of buying a vehicle!
Vehicle deduction question…should we sell and buy a new truck before EOY?
byu/EngineeringThink4044 intax
Posted by EngineeringThink4044
2 Comments
You have probably depreciated the original truck that such its basis is less than you would sell for and thus pick up taxable income
How much have you depreciated current truck?
Probably not a good idea especially if current truck works fine
The interest rate on truck is irrelevant to taxation on the sale of truck
The interest deduction is for personal vehicles only…you’ve always been able to deduct the business use portion of vehicle interest as a business expense (even when taking the standard mileage rate). Your thinking is a little off as a result here
You need to have a professional run the numbers because depreciation recapture will come into play here. But I doubt the interest savings will be enough to make this make sense