Overhaulin'

I sold my car this year and paid off the car loan on it. Should I pay taxes on the car sale proceeds ?

The car sale was less than the loan amount I paid off. I am working on y taxes for this year and was ot sure if I should declare this as a source of income and pay tax on it ?

Public Comments

1. You only pay taxes on the sale of a personal asset if you recognized a gain. In determining whether there was a gain or loss on the sale, you consider the amount that you paid for the car, not how much it cost you to pay off the loan (since the loan would also be comprised of unpaid interest, which would be nondeductible).