Private Sale of Motor Vehicle?

Question

Do I have to pay taxes?

On a second thought, I should have a loss right? Since the car has depreciated during the years I owned - can I claim to loss on the tax return?

Thanks!!

Answer 1

If you sold a car for more than you paid for it (highly unlikely), the gain would taxable.

Losses on personal property are not deductible.

Answer 2

Yes the car has depreciated over the time you owned it, in the sense that it has lost value. But you were not allowed to deduct that depreciation because the vehicle was not used for business.

Be glad of this, because you will only owe tax if you sell the car for more than you paid for it, which is unlikely. You will not have any gain or loss to report.

Answer 3

I do not believe that a private sale of a vehicle would be considered a sale of a booked asset. Have you been amortizing the devaluation of your vehicle on your Balance Sheet for a business? Is this vehicle used for your own business purposes? Don't you think that if everyone could claim a credit on their tax returns for personal vehicles they would?

You do have to pay sales tax on the purchase of vehicle. The buyer in this case has to pay the taxes not you. No you cannot claim vehicle depreciation value on personal tax returns. This is why people should not buy new cars! It ends up costing the consumer too much money (depreciation, taxes, interest, added insurance coverage) to drive new cars.

Answer 4

Not if it was a car for personal use. Loss on sale of property which you purchase for personal use and actually use cannot be claimed as a capital loss. Possibly if it was a business asset, but only to the extent that the actual loss exceeds the amount that was, or could have been, deducted for depreciation.

Answer 5

Ha ha. Nice try. It depreciates because you own it, and probably use it. No, that's not a tax loss.

Answer 6

If you sell it at a gain, it's taxable. If you sell at a loss, it is NOT deductible. Fair? No. But that's the law. Blame Congress, they wrote it.