If you have depreciated all or a portion of the value of a business
vehicle on your IRS Schedule C, and then trade it in for a new
vehicle, what effect does that have on the basis of the new vehicle
for its depreciation

<As you have traded one business vehicle for another business vehicle
it will be treated as a like-kind exchange. A like-kind exchange is
when you trade in an asset for another asset of the same category. You
couldn’t for example treat a trade in of a car for a new computing
system as a like-kind exchange. A trade in of for example an old truck
for a new van would qualify as they are both vehicles and therefore in
the same category.

Form 8824 needs to be filed to report a like-kind exchange

Depreciation is claimed by completing and submitting form 4562 with
your tax return.

The basis of the new asset is calculated by adding the basis of the
old asset to the price paid for the new asset. Suppose you trade in a
car with an adjusted basis of $2000 for another car and pay an
additional $5000. The basis in the new car will be $7000 (the $2000
basis of the old car plus the $5000 that you paid). Further
information about the calculating the basis of assets can be found in
IRS publication 551.

For new assets acquired after 10th September 2001 up to 30%
depreciation can be claimed in the first year. If you have already
filed your 2001 tax return, it is possible to claim this extra
depreciation by filing form 1040X. IRS publication 463 explains the
rules for claiming this depreciation.

Forms and instructions can be downloaded from the IRS website (a link
is given below).>


<Additional links:>

<Internal Revenue Service>
<http://www.irs.gov/>

<Depreciation automotive tax tips.>
<http://www.irs.gov/businesses/small/industries/article/0,,id=98994,00.html>

<Disposition of a car.>
<http://www.irs.gov/formspubs/page/0,,id%3D26876,00.html>

<New depreciation rules for assets acquired after 10 September 2001.>
<http://www.irs.gov/formspubs/article/0,,id=81390,00.html>

<Explanation of new depreciation rules.>
<http://www.irs.gov/pub/irs-pdf/p463supp.pdf>

<Sales and Other Dispositions of Assets.>
<http://www.irs.gov/pub/irs-pdf/p544.pdf>

<Basis of assets.>
<http://www.irs.gov/pub/irs-pdf/p551.pdf>




<Search strategy:>

<irs "new rules" depreciation "like-kind">

<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=irs+%22new+rules%22+depreciation+%22like-kind%22>

<irs>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=irs>


<Hope this helps.>

I recieved an exact answer to my question plus links to additional
related information. It dosen't get any better than that.