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How to report loss on vehicle trade in?

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Hi!

I am still pretty new to QBO. I am currently recording our assets and am a little stuck.

We purchased a vehicle cash for $15,000 last March and then traded it in for a different vehicle(with a loan). Trade in value was only $12,000. How do I record the $3,000 loss?

Thank you!!

QuickBooks Online

RainflurryAnswer

@Nika Sutton

Record a journal entry similar to below. For illustrative purposes, I assumed a new vehicle purchase price of $30K. Change the numbers for the new vehicle asset and loan payable for your specific case. Debits and credits must be equal.

	Debit	Credit
New vehicle - Fixed asset (purchase price)	30,000
Loss on disposition of old vehicle	3,000
Old vehicle - to remove from books		15,000
Loan payable		18,000

Rainflurry

@Nika Sutton

Did you trade in the vehicle in 2023? If so, you will need to contact your CPA/tax accountant and figure out the depreciation that needs to be taken into account. You may not have a loss to record depending on the amount of depreciation taken on your 2022 tax return.

N

Nika SuttonAuthor

@Rainflurry

Thank you for reaching out!

No, I bought the vehicle in March 2022 and traded it in October of 2022.

RainflurryAnswer

@Nika Sutton

Record a journal entry similar to below. For illustrative purposes, I assumed a new vehicle purchase price of $30K. Change the numbers for the new vehicle asset and loan payable for your specific case. Debits and credits must be equal.

	Debit	Credit
New vehicle - Fixed asset (purchase price)	30,000
Loss on disposition of old vehicle	3,000
Old vehicle - to remove from books		15,000
Loan payable		18,000

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