Here is a question that I'm seeking an answer for;
Tax on trade in,
As a example
If you purchase a car for $50,000 and trade in a car for $20,000 you only pay tax on the difference for the new car = $30,000.
What happens when you have a trade in car that is worth more then the new car you want to purchase? For example I want to trade in my car and the dealership offered me $30,000 and the new car I want to buy is only $25,000? So is it just no taxes that has to be paid?
Quote:
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Originally Posted by http://www.autofocus.ca/how-to/used-guides/how-to-get-the-most-value-from-your-trade-in
Tax Savings
Dealers also allow you to take advantage of something called “tax savings.” This involves subtracting the value of your trade-in from the retail price of its replacement before any of the amounts are taxed. This effectively reduces the tax amount you need to pay on your new vehicle. For instance, if the car you want to buy costs $40,000 and your trade-in value is $25,000, then the taxable amount is the difference of those two numbers, which is $15,000.
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