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Sold my car, will I owe taxes?

Dra#gonPanda

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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Accepted answers

JMSSGV

How you paid for the car is irrelevant. If you did not use this car in a a business, you had a loss of $7,000 (the difference between the sales price and the purchase price.) Since personal losses are not deductible, this has no effect on your income taxes.

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JMSSGV

LaurenW

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

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

RustyL

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.