Overhaulin'

Do I pay income tax on personal used car sale proceeds?

I sold my personal car this year after buying a new one. Do I have to report the amount received as income and is it taxable? Where can I confirm this information?

Public Comments

1. You're capital gain or loss is figured by subtracting your cost basis in the car from your sales proceeds. If you bought the car for $4000 and sold it for $5000 you would have a $1000 capital gain. The cost, proceeds, date bought and date sold would be reported on Form 1040 Schedule D. Depending on how long you owned the car will determine if the gain was short-term or long-term. HOWEVER, if you sold the car at a loss, the loss is not deductible on your tax return.