MinhT1
Expert Alumni

Get your taxes done using TurboTax

If the settlement was for loss-in-value of your vehicle and is less than the original value of your vehicle, then the settlement received isn't taxable and isn't reportable.

 

If the settlement exceeds the original value of your vehicle, the excess is income (capital gain) and has to be reported on Schedule D.

 

Please read this IRS document for more information.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"