sold my car - do i pay income tax on that?

[schwza]

well, that pretty much says it. i sold my car last year and i'm wondering if i have to pay tax on it. turbotax didn't ask specifically, but there's a spot for "other income."

[meep_42]

I don't think so. You already paid the tax on what money you used to buy the car in the first place.

-d

[GoblinMason (Craig)]

I don't know much about taxes, but I wouldn't think you'd have to unless you sold it for more than you paid.

[FishBurger]

I think you would only have to pay tax on it if you sold it for more than you paid for it. Otherwise, you have a loss and have not recognized any income.

[Felix_Nietsche]

Did you make a profit on selling your car?
For 99.99% of people the answer is NO....

[BottlesOf]

Not if you sold it for market value or less. You just converted an asset from car to cash.

[SomethingClever]

I recently sold my DeLorean made out of Mickey Mantle rookie cards.... do I have to pay tax on that?

[codewarrior]

You're kidding, right? Only if the car appreciated, like others said.

I see here in some towns in Ohio we'll have to start paying a local tax hen you sell your house. I hope this does not pass. Houses are cheap here, I'd like them to stay that way for another year or so.

[jstnrgrs]

[ QUOTE ]
I don't know much about taxes, but I wouldn't think you'd have to unless you sold it for more than you paid.

[/ QUOTE ]

I don't know much either, but I think even in that case, the approprate tax would be the capital gains tax (not income).

[jstnrgrs]

I think if you have written off deprecation to offset capital gains in previous years, then you would have to pay a capital gains tax. But if you haven't done that, then there is no tax unless you sell it for more than you bought it for.

[KaiShin]

[ QUOTE ]
I think if you have written off deprecation to offset capital gains in previous years, then you would have to pay a capital gains tax. But if you haven't done that, then there is no tax unless you sell it for more than you bought it for.

[/ QUOTE ]
If he did that, he wouldn't have had to post this question in the first place. He'd already be an accounting machine /images/graemlins/cool.gif

[b0000000000m]

Yeah, trying to use your "intuition" when it comes to taxes will frequently bite you in the ass. Many of the posters above provide the correct answer for your situation--but if you applied their reasoning to other situations, the result would be incorrect.

Here is the actual law:

If the car has been used in a business, and the business has been deducting the vehicle's depreciation, then the proceeds from the sale of the vehicle are claimed on schedule C.

If there's been no business use, it's not income.


Holy crap, I actually remembered something from my Federal Income Taxation class.