Do I need a Like-Kind Exchange when selling a personal vehicle for a company car
You cannot do a like-kind (Sec. 1031) exchange for personal property, only for business/investment property. Since you said that you traded in your personal car - no like-kind exchange is possible. Also, since the new car doesn't belong to you - you didn't actually perform any exchange. You sold your old car, but you didn't buy a new one. If Turbo-Tax suggests you to fill the exchange form - you must have entered something wrong to make it think there was an exchange. Check your entries again, specifically - check if you entered that you purchased a new car instead of the old one, since you didn't. See an example of where to start looking here.
"In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. As it's property like any other, capital gains if and when you sell are taxed. As with any capital gains, you're taxed on the ""profit"" you made, that is the ""proceeds"" (how much you got when you sold) minus your ""basis"" (how much you paid to get the property that you sold). Until you sell, it's just an asset (like a house, or a share of stock, or a rare collectible card) that doesn't require any reporting. If your initial cryptocurrency acquisition was through mining, then this section of that Notice applies: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income. That is to say, when it was mined the market value of the amount generated should have been included in income (probably on either Line 21 Other Income, or on Schedule C if it's from your own business). At that point, the market value would also qualify as your basis. Though I doubt there'd be a whole lot of enforcement action for not amending your 2011 return to include $0.75. (Technically if you find a dollar bill on the street it should be included in income, but usually the government cares about bigger fish than that.) It sounds like your basis is close enough to zero that it's not worth trying to calculate a more accurate value. Since your basis couldn't be less than zero, there's no way that using zero as your basis would cause you to pay less tax than you ought, so the government won't have any objections to it.  One thing to be careful of is to document that your holdings qualify for long-term capital gains treatment (held longer than a year) if applicable. Also, as you're trading in multiple cryptocurrencies, each transaction may count as a ""sale"" of one kind followed by a ""purchase"" of the other kind, much like if you traded your Apple stock for Google stock. It's possible that ""1031 like kind exchange"" rules apply, and in June 2016 the American Institute of CPAs sent a letter asking about it (among other things), but as far as I know there's been no official IRS guidance on the matter. There are also some related questions here; see ""Do altcoin trades count as like-kind exchanges?"" and ""Assuming 1031 Doesn't Apply To Cryptocurrency Trading"". But if in fact those exchange rules do not apply and it is just considered a sale followed by a purchase, then you would need to report each exchange as a sale with that asset's basis (probably $0 for the initial one), and proceeds of the fair market value at the time, and then that same value would be the basis of the new asset you're purchasing. Using a $0 basis is how I treat my bitcoin sales, though I haven't dealt with other cryptocurrencies. As long as all the USD income is being reported when you get USD, I find it unlikely you'll run into a lot of trouble, even if you technically were supposed to report the individual transactions when they happened. Though, I'm not in charge of IRS enforcement, and I'm not aware of any high-profile cases, so it's hard to know anything for sure. Obviously, if there's a lot of money involved, you may want to involve a professional rather than random strangers on the Internet. You could also try contacting the IRS directly, as believe-it-or-not, their job is in fact helping you to comply with the tax laws correctly. Also, there are phone numbers at the end of Notice 2014-21 of people which might be able to provide further guidance, including this statement: The principal author of this notice is Keith A. Aqui of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information about income tax issues addressed in this notice, please contact Mr. Aqui at (202) 317-4718" "Here I thought I would not ever answer a question on this site and boom first ten minutes.  First and foremost I am in the automotive industry, specifically one of our core competencies is finance department management consulting and the sales process both for the sale of the care as well  as  the financial transaction. First and foremost new vehicle gross profits are nowhere near 20% for the dealership.  In an entry level vehicle like say a Toyota Corolla there is only a  few hundreds of dollars in markup from invoice to M.S.R.P.  There is also something called holdback that dealers get for achieving certain goals such as sales volume. These are usually pretty easy to hit. As a matter of fact I have never heard of a dealer not getting the hold back on a deal.  This hold back is there to cover overhead for the car, the cost of getting it ready to sell, having a lot to park it on, making it ready for delivery, offset some of the cost of sales labor  etc.  Most dealerships consider the holdback portion of the invoice to not be part of the deal when it comes to  negotiations.  Certain brands such as KIA and Chrysler have something called ""Dealer Cash"" these payouts are usually stair stepped according to volume and vary by dealer, location, past history, how the guys at the factory feel that day and any number of combinations.  Then there is CSI or Customer Service Index payments, these payments are usually made every 1/4 are on the Parts Statement not the Sales Doc and while they effect the dealers bottom line they almost never affect the sales managers or sales persons payroll so they are not considered a part of the cost of the car.  They are however extremely important to  the dealer and this is  why after you have your new car they want you to bring in your survey for a free oil change or something.  IF you are going to give a bad survey they want to throw it away and not send it in, if you are going to give a good survey they want to  make sure you fill it out correctly.  This is because lets say they ask you on a scale of 1-10 how was your sales person and you put a 9 that is a failing score. Dumb I know but that is how every factory CSI score system I have seen worked.  According to NADA the average New Vehicle gross profit including hold back and dealer cash is around $1000.00.  No where near 20%.  Dealerships would love it if they made 20% on your new F250 Supercrew Diesel at around $50,000.00.  One last thing there is something on the invoice called Wholesale Finance Reserve.  This is the amount of money the factory forwards to the Dealership to offset the cost of financing vehicle on the floor plan so they can have it for you to look at before you buy.  This is usually equal to around 3 months of interest and while you might buy a vehicle that has been on the lot for 2 days they have plenty that have been there much longer so this equals out in a fair to middling run store. General Mangers that know what they are doing can make this really pad their net profit to statement. On to incentives, there are basically 3 kinds.  Cash to customer in the form of rebates, Dealer Cash in the form of incentives to dealerships based on volume or the undesirability of a vehicle, and incentive rates or Subvented leases.  The rates are pretty self explanatory as they advertised as such (example 0% for 60 Months).  Subvented Leased are harder to figure out and usually not disclosed as they are hard to explain and also a source of increased profit.  Subvented leases are usually powered by lower cost of money called a money factor (think of it as an interest rate) that is discounted from the lease company or a subsidized residual.  Subsidized residuals are virtually verboten on domestic vehicles due to their poor resell values.  A subsidized residual works like this, you buy a Toyota Camry and the ALG (automotive lease guide) says it has a residual at 36 months of 48%.  Well Toyota Motor Credit says we will give you a subvented residual of 60% basically subsidizing a 2% increase in residual.  Since they do not expect to be able to sell the car at auction for that amount they have to set aside the 2% as a future expense.  What does this mean to you, it means a lower payment.  Also a good rule of thumb if you are told a money factor by your salesperson to figure out what the interest rate is just multiply it by 2400.  So if a money factor is give of .00345 you know your actual interest rate is a little bit lower than 8.28% (illustration purposes only money factors are much lower than that right now). So how does this save you money well a lease is basically calculated by multiplying the MSRP by the residual and then subtracting that amount from the ""Capitalized Cost"" which is the Price paid for the car - trade in + payoff + TT&L-Rebate-Down Payment.  That is the depreciation.  Then you divide that number by the term of the loan and you have the depreciation amount.  So if you have 20K CC and 10K R your D = 10K / 36 = 277 monthly payment.  For the rest of the monthly payment you add (I think been a long time since I did this with out a computer) the Residual plus the CC for $30,000 * MF of .00345 = 107 for a total payment of 404 ish.  This is not completely accurate but you can use it to  make sure a salesperson/finance person is not trying to do one thing and  say another as so often happens on leases. 0% how the  heck do  they make money at that, well its simple.  First in 2008 the Fed made all the ""Captive"" lenders into actual banks instead of whatever they were before.  So now they have access to the Fed's discounting window which with todays monetary policies make it almost free money.  In the past these lenders had to go through all kinds of hoops to raise funds and  securitize loans even for super prime credit.  Those days are essentially over.  Now they get their short term money just like Bank of America does.  Eventually they still bundle these loans and sell them.  So in the short term YOU pay for the 0% by giving up part or all of your rebate.  This is really important DO NOT GIVE up your rebate for 0% unless it makes sense to do so.  When you can get the money at 2.5% and get a $7000.00 rebate (customer cash) on that F250 or 0% take the cash.  First of all make the finance guy/gal show you the the difference in total cost they can do do this using the federal truth in lending disclosures on a finance contract.  Secondly how long will you keep the vehicle?  If you come out ahead by say $1500 by taking the lower rate but you usually trade out every three years this is not going to work.  Also and this is important if you are involved in a situation with a total loss like a stolen car or even worse a bad wreck before the breakeven point you lose that price break.  Finally on judging what is right for you, just know that future value of the vehicle on for resell or trade-in will take into effect all of these past rebates and value the car accordingly.  So if a vehicle depreciates 20% a year for the first 3 years the starting point will essentially be $7000.00 less than you actually paid,  using rough numbers. How does this help the dealers and car companies?  Well while a dealer struggles to make money on new cars the factory makes all of their money on the  new cars and the new car financing.  While your individual loan might lose money that money is offset by the loss of rebate and I think Ford does actually pay Ford Motor Credit Company the difference in the rate.  The most important thing is what happens later FMCC now has 2500 loans with people with perfect credit.  They can now use those loans to budle with people with not so perfect credit that they financed at 12%-18% and buy that money with interest rates in the 2%-3% range.  Well that is a hell of a lot of profit.  'How does it help the dealership, well the more super prime credit they have in their portfolio the more subprime credit the banks will buy for them.  This means they have more loans originated that are more profitable for them.  Say you come in for the 0% but have 590 credit score, they get FMCC to buy the deal because they have a good portfolio and you win because the dealer gets to buy the money at say 9% and sell it to you at say 12% making the spread.  You win there because you actually qualified for a rate of around 18% with a subprime company like Santander or Capital One (yes that capital one) so  you save a ton on your overall cost of the car. Any dealership that is half way well run makes as much or money in the finance and insurance office than the rest of the dealership.  When you factor in what a good F&I Director can do to get deals done with favorable terms that really goes up.  Think about that the guys sitting a desk drinking coffee making more than the  service department guys all put together. Well that was long winded but there I broke down the car business for whoever read this far." "Seems to me you don't have a ton of great choices, but of them: Keep going as you are.  If/when the car becomes unusable without significant expenses, stop using it.  Buy another junker and use that to get by until your loan is paid off.  From now until then, put aside a few hundred (or whatever you can, if more) each month towards the anticipated purchase.  When you do buy this junker, pay in cash - no loan.  Just get something that will take you to work, and that includes ""bike"" if that's a possibility.  When you can, sell the no longer usable car to finish paying off the loan. Start aggressively paying off the current loan, with the eye of getting it down to where you're not underwater anymore.  Then sell the car and dispose of the loan, and buy a better replacement.  Scrimp and save and cut everything - eat cheaply (and never out), cut your personal expenses everywhere you can.  If you get another $250 a month towards principal, you can probably be no-longer-underwater in about a year. Get a personal loan today for the amount that you're underwater, and immediately sell the car.  This gets you out of the loan and car the quickest, and if you think the car will devalue significantly between now and when you might be not underwater anymore, this might be the best option.  But it's the most expensive, likely - you'll pay 12% to 20% on the difference.  Now, 12% of $5000 is less than 5% of 15000, so it might actually be a good financial deal - but you'll probably have to shop around to get 12-15% with a 660 (though it's probably possible).  You'll still be without a car at this point, though, so you'd have to buy another one (or live without for a while), and you'd still have a payment of some sort, but perhaps a more manageable one ($5000 @ 12% @ 5 years means something a bit over $100 a month, for example.) I recommend that if you can get by without a car for a while, option 2 is your best bet.  All of these will require some financial care for a while, and probably cutting back on expenses for a year or two; but realistically, you shouldn't expect anything else.  Get a budgeting app if it will help see how to do this. As far as getting out of the loan without paying it, I don't recommend that at all.  Your credit will be ruined for at least seven years, and 660 is not bad at all really, and then would take  yet more years to recover.  You will likely be sued for the balance plus collection costs, beyond repossession.  The consequences would be far, far worse than just paying it off, and I mean that financially as well as ethically." "This stock is the same as any other, but you need to keep clear in your head that you and your company are now different entities.  You (the person) will pay tax on capital gains and losses when you sell any stock that you hold in your own name.  You'll also owe ""regular"" tax if you draw a salary, etc.  The fact that it may be ""your"" company does not change these things. The company will not recognize a gain by selling stock to raise capital since it's nominally exchanging things of equal value, say $100 in cash for $100 in stock.  In order to sell stock, however, you MIGHT need to register with the SEC depending on how you're going about finding your investors, so keep that in mind." "I am going to keep things very simple and explain the common-sense reason why the accountant is right: Also, my sister in law owns a small restaurant, where they claim their accountant informed them of the same thing, where a portion of their business purchases had to be counted as taxable personal income. In this case, they said their actual income for the year (through their paychecks) was around 40-50K, but because of this detail, their taxable income came out to be around 180K, causing them to owe a huge amount of tax (30K ish). Consider them and a similarly situated couple that didn't make these purchases. Your sister in law is better off in that she has the benefit of these purchases (increasing the value of her business and her expected future income), but she's worse off because she got less pay. Presumably, she thought this was a fair trade, otherwise she wouldn't have made those purchases. So why should she pay any less in taxes? There's no reason making fair trades should reduce anyone's tax burden. Now, as the items she purchased lose value, that will be a business loss called ""depreciation"". That will be deductible. But the purchases themselves are not, and the income that generated the money to make those purchases is taxable. Generally speaking, business gains are taxable, regardless of what you do with the money (whether you pay yourself, invest it, leave it in the business, or whatever). Generally speaking, only business losses or expenses are deductible. A purchase is an even exchange of income for valuable property -- even exchanges are not deductions because the gain of the thing purchased already fairly compensates you for the cost. You don't specify the exact tax status of the business, but there are really only two types of possibilities. It can be separately taxed as a corporation or it can be treated essentially as if it didn't exist. In the former case, corporate income tax would be due on the revenue that was used to pay for the purchases. There would be no personal income tax due. But it's very unlikely this situation applies as it means all profits taken out of the business are taxed twice and so small businesses are rarely organized this way. In the latter case, which is almost certainly the one that applies, business income is treated as self-employment income. In this case, the income that paid for the purchases is taxable, self-employment income. Since a purchase is not a deductible expense, there is no deduction to offset this income. So, again, the key points are: How much she paid herself doesn't matter. Business income is taxable regardless of what you do with it. When a business pays an expense, it has a loss that is deductible against profits. But when a business makes a purchase, it has neither a gain nor a loss. If a restaurant buys a new stove, it trades some money for a stove, presumably a fair trade. It has had no profit and no loss, so this transaction has no immediate effect on the taxes. (There are some exceptions, but presumably the accountant determined that those don't apply.) When the property of a business loses value, that is usually a deductible loss. So over time, a newly-purchased stove will lose value. That is a loss that is deductible. The important thing to understand is that as far as the IRS is concerned, whether you pay yourself the money or not doesn't matter, business income is taxable and only business losses or expenses are deductible. Investments or purchases of capital assets are neither losses nor expenses. There are ways you can opt to have the business taxed separately so only what you pay yourself shows up on your personal taxes. But unless the business is losing money or needs to hold large profits against future expenses, this is generally a worse deal because money you take out of the business is taxed twice -- once as business income and again as personal income. Update: Does the business eventually, over the course of the depreciation schedule, end up getting all of the original $2,000 tax burden back? Possibly. Ultimately, the entire cost of the item is deductible. That won't necessarily translate into getting the taxes back. But that's really not the right way to think about it. The tax burden was on the income earned. Upon immediate replacement, hypothetically with the exact same model, same cost, same 'value', isn't it correct that the ""value"" of the business only went up by the amount the original item had depreciated? Yes. If you dispose of or sell a capital asset, you will have a gain or loss based on the difference between your remaining basis in the asset and whatever you got for the asset. Wouldn't the tax burden then only be $400? Approximately, yes. The disposal of the original asset would cause a loss of the difference between your remaining basis in the asset and what you got for it (which might be zero). The new asset would then begin depreciating. You are making things a bit more difficult to understand though by focusing on the amount of taxes due rather than the amount of taxable gain or loss you have. They don't always correlate directly (because tax rates can vary)." Unusual.  Most dealers pay interest on their inventory, so they don't like having so much around so long.  But they dislike taking a loss on a car, so if the market is weak for a few months, they may choose to wait for an upturn rather than cut prices enough to move the cars. Could be misunderstanding your context. But ev = equity + debt - cash. So don't think it makes sense for an equity holder to have an individual ev/ebitda different from the company's.   Are you asking in context of valuing equity and debt from an ev/ebitda multiple? As others have addressed the legality in their answers, I want to address the idea of the dealership being 'a middleman'. A dealership serves more of a purpose than just 'middlemanning' a car to a consumer. Actually, they consume a great deal of risk. Let's remember that a dealership is really an extension of the OEM, albeit independently owned and operated, the dealership must still answer to the brand they represent, if people have a bad experience with a dealership, a customer might go to another of the same brand, but more often than not they will go to the competition out of spite. Therefore, it's in the dealership's best interest to represent the brand as best as possible, but unfortunately that doesn't always happen.  While the internet has made a certain part of a salesman's role null and void, and since this is a finance (read money) Q/A site let's take a moment to consider the risk assume and therefore the value added by a dealership: Test Drive. A car is a huge purchase, and while it's okay to buy a pair of shoes online without trying them on, a car is a bit different of course, we want to make sure it 'fits' before we shell out several thousand dollars. Yes, you (meaning consumers) can look at car pictures and specs online, but if you want to see how that vehicle handles on your town's roads, if it fits in your garage and/or driveway, then you need to take it for a test drive. It's not feasible for OEMs to have millions of people showing up to car plants for a test drive, right? Scalability aside, some business that is handled in automotive plants are confidential and not for the general public to know about. A dealership provides an opportunity for those who live locally to see and experience the car without flying or driving wherever the car was assembled. They provide this at a risk, banking on the fact that a good experience with the vehicle will lead to a sale. Service. A car is a machine, and no machine is perfect, neither will it last forever without proper service. A dealership provides a place for people to bring their vehicles when they need to be serviced. Let's set aside the fact that the service prices are higher than we'd like, because the fact remains most of it is skilled (and warrantied) labor that the majority of people don't want to do themselves. Trade Ins. It is not in an OEMs best interest to accept a vehicle just to sell you another vehicle, especially if that vehicle is from another brand. Dealership's assume this risk, and often offer incentives to do so, hoping it will lead to a sale. That trade in was an asset to you, but is a liability to them, because they now have to liquidate that trade in, just so that you can purchase a car. Sure, you could sell your car yourself, and now you would assume that risk: What if your car is not in perfect shape, or has a lot of miles for it's age? Would it do well in the used car market? What if it takes too long to sell and you miss that Memorial Day car sale at the dealer? This might be okay for some, but generally speaking most people would rather avoid the risk and trade it in at the dealer toward the purchase of a new car rather than the headache of selling it themselves. I'm sure there are more, but those are the one's that immediately sprung to mind. Just like Starbucks, there are terrible dealerships out there and there are great ones, and very few of us venture to farms and jungles just for fresh coffee beans :-)