Sold my car, will I owe taxes?

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DragonPanda
DragonPanda Member Newcomer

I sold my car for $14,000. $7,000 was used to pay off the remaining loan amount. I originally bought my car for $21,000. I have ordered my next vehicle and the remaining $7,000 is the down payment for my new vehicle. Will I owe taxes for the $7,000 I was paid? Will I owe for the full $14,000 I sold my car for?

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  • LaurenW
    LaurenW FreeTaxUSA Agent
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    Hi DragonPanda:

    As JMSSGV stated, if a car is used for personal use and wasn't used in a business, a rental property, or as an investment, then you normally don't report the sale on your tax return.

    However, if you had sold the car for more than you originally purchased it for, then you would have reported the sale as an investment.

  • dutchman
    dutchman Member Newcomer
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    What if salesperson and sold your car used for business travel for amount still owed on bank note only?

  • RustyL
    RustyL FreeTaxUSA Agent
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    dutchman, in that case, you would enter the vehicle in the 'Business Income' section of the 'Income' tab in the 'Vehicle Expenses' portion. The sales price would be whatever the vehicle sold for, even if it was only for the amount on the bank note.