How to Calculate Federal Tax AMT for a Vehicle Trade-In

Determine the tax basis of the replacement vehicle for your trade-in using the same method used in previous tax years. This will give you the maximum amount that you can claim as depreciation for the new vehicle. Use this figure to determine your tax liability using the regular tax method. This will typically require using IRS Form 4797 for a business owner or Form 2016 for an employee using his vehicle for business purposes.

Determine the tax basis of the replacement vehicle using the AMT method, regardless of the method used in previous tax years. Under the AMT provisions, you must use the longer depreciation formulas.

Determine the difference between the two results. This figure will be used with IRS Form 6251, which is used to determine whether you will pay the AMT or the tax amount using the regular method.