Overhaulin'

Do I have to claim the income from my car sale on my taxes?

I live in CA, and acquired a car in 2009 through a family transfer (not a gift, but I paid $1). I just sold this car privately for $9500. Since I acquired this through a family transfer and not a private sale, do I have to pay tax on the $9499 income? The DMV website doesn't seem to address this situation anywhere. I don't know why my dad thought it would be beneficial for us to pay $1 instead of nothing at the time of transfer.

Public Comments

1. the person who bought it has to pay SALES tax. unless you used this vehicle for your business and have record of it on your Schedule C or F, then no.
2. You paid $1 and the balance of the car's value was a gift from your father. Undoubtedly, the car was worth more then than it is now unless it's some kind of special car - an antique for instance. Therefore, whatever you sold the car for now would be less than the value of the gift plus your $1 back then. In other words, you didn't make a profit so don't declare it on your income taxes.