The question and answer are locked and cannot be edited.

Does selling your old car count as income and do you have to pay income tax on that?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

Whether the money received from the sale of your car is taxable or not depends on if the car was for business vs. personal use.


If the car has been used in a business and there was a tax deduction taken for depreciation, you must report the recapture of depreciation from the sale on Form 4797 and calculate any gain or loss. A gain would be taxable; a loss may be deductible against your other income.

Losses on the sale of personal property are not deductible, but gains from such sales are taxable. The gain is calculated by subtracting the amount of the sale minus the purchase price. It is rare to have a gain on the sale of a personal vehicle because no depreciation deduction can ever be taken for personal use items. Therefore, the cost/basis of the vehicle remains the same (what you originally paid for the car). For the vast majority of cars, the selling price is less than what the owner paid for it. However, classic and collector cars have been known to yield gains for their owners. If you happened to be fortunate enough to buy a car which became a classic and increased in value, you would have a reportable capital gain. For these types of gains, the amount of tax owed depends on how long the car was owned. If owned for a year or longer, the long-term capital gain treatment is applied and the taxes are less than if the car was owned for less than a year.
+ 107 others found this useful
Thanks for the feedback!

Are we supposed to pay income tax?

There is a HUGE misconception that we in America are obligated to pay income taxes. The truth is we are not. Without going into all the details its really this simple. If the

Do you pay income tax when you sell your car?

With the exception of collectibles and/or antiques, cars usually lose value over time. However, if there is a gain or profit from the sale of any vehicle, the gain or profit i

Does an income of 9000 have to pay taxes?

This answer would depend on your filing status as a dependent on another taxpayers income tax return YES and you would also have to pay some income tax on the taxable amount a

When do you have to pay federal income tax?

  Your taxes must be paid through out the year. That is, by either payroll withholding or making estimated payments on your estimated amount due quarterly...with a Form 10

Who pay tax on income property?

  The owner of the property pays the tax on the income generated by the property. This is known as the "fruit of the tree doctrine."

Do they pay income taxes in the Bahamas?

The Bahamas has absolutely no personal income tax, no corporate income tax, no capital gains tax, and no inheritance tax.

Do you pay income tax in Texas?

Every1 in the world pays income tax  Texas does not have a State income tax, collecting that same revenue using other tax means. You of course pay Federal income taxes.

Do you have to pay taxes if you are low income?

The answer depends on how much money you earned, your source of income, and your number of dependents, if any. You may be eligible for a tax credit under certain circumstances

Do you have to pay federal income tax?

Yes. In the United States, the Federal Government pay levy taxes on income. As the initial proposition for what became Amendment XVI had no time limit, and since more than

When you sell a car do you have to claim it on income tax return?

With the exception of collectibles and/or antiques, cars usually lose value over time. However, if there is a gain or profit from the sale of any vehicle, the gain or profit i

When do you start paying income taxes?

There are no age (young or old), or start and stop times for income tax. It is all a matter of Taxable Income (not a matter of working - many people who don't work have or mak

Do Americans pay income taxes?

Some do. Some don't. I don't recall exactly what the number is but I think if your income is less than about $13,000 you are not required to pay income tax. You can probably f