Is Dealer Compelled to Issue 1099 with Cash Back on Trade-in?

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Is Dealer Compelled to Issue 1099 with Cash Back on Trade-in?

Is Dealer Compelled to Issue 1099 with Cash Back on Trade-in?

I'm considering trading in my '06 E46 for a new E93 that I intend to lease. The net trade-in value of the '06 would be around $24K after my payoff. I would apply a small amount of that to a down pmt on the '07, and then lease it. So I would wind up with around $20K in my pocket. Will I get a 1099 for this $24K? .... I would think not since I actually have incurred a loss (depreciation) on the value of the asset. But I dunno - the IRS certainly has mandated strange things.

Does anyone know? Thanks.

Doug
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Reply » Is Dealer Compelled to Issue 1099 with Cash Back on Trade-in?

I've walked away with big lump sums of cash, bigger than yours in fact, and I have never had a 1099. It doesn't apply anyway as conversion of equity does not represent income. I suppose if you traded it for more than you bought it you would then be expected, yourself, to report it as investment income.

Reply » Is Dealer Compelled to Issue 1099 with Cash Back on Trade-in?

Why would you get a 1099? How is this payment income since you already stated you lost money?

Reply » Is Dealer Compelled to Issue 1099 with Cash Back on Trade-in?

No 1099

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