Ok,

if I still owe Bank money on my Trade in

Lets say

- New car I wanna buy cost 30K
- I have a car I wanna trade in, worth 20K, but I still owe Bank 15K
- so the dealer will pay the bank 15K to buy my car out, the rest of the money goes into the cost of new car.

Will my "taxable" amount based on :

- (New car cost - Trade in) x tax rate = the amount of tax I need to pay

or

- (New car cost - (Trade in - loan from bank)) x tax rate = taxable amount ?

I think it should be the first one, correct?

I'm 90% sure. just wanna be 100%

 

Depends on your state law. In California, the "taxable" amount would be the selling price of the car before any rebates or trade-in amounts are subtracted. Not sure about the law in NY.

 

I found some info about this and it seems that the taxable amount in NY is

(Selling price - Trade in) x Tax rate = Tax due.

Thanks a lot !