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In 2018, you trade in your old truck for a new one. The cost of the new truck is $45,000. The dealer gives you a $15,000 trade-in allowance. Results: 1. Gain: $15,000 (trade-in allowance $15,000 minus adjusted basis of old truck $0). Taxed at ordinary income tax rates to the extent of depreciation. 2. Depreciable basis of new truck: $45,000. 3.
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