Before January 1st, 2020
New Car Price…………………………………………$65,000
Your Current Vehicle Value……………………….$38,000
Trade-In Tax Credit………………………………….$38,000
Taxable Amount……………………………………..$27,000
Tax Paid…………………………………………………$2,430
Total Cost………………………………………………$29,430
After January 1st, 2020
New Car Price…………………………………………$65,000
Your Current Vehicle Value……………………….$38,000
Trade-In Tax Credit………………………………….$10,000
Taxable Amount……………………………………..$55,000
Tax Paid…………………………………………………$4,950
Total Cost………………………………………………$31,950
For instance, if you traded in a vehicle valued at $38,000 before January 1st, 2020, for a new vehicle valued at $65,000, you would receive a credit worth your current vehicle value, and only be taxed on the difference.
Starting on January 1st, 2020, you will only receive a trade-in credit of $10,000, instead of the value of your vehicle, making the taxable amount of your vehicle $28,000. Plus you will still be paying tax on the cost of your trade ($27,000), making the total taxable amount $55,000.
You can get the best-estimated value for your vehicle right now at Land Rover of Naperville!
