I am sorry but I am still not fully clear because I didn't sell anything. Allow me to reiterate.
I bought a car new 15 years ago for $36,000. I separately paid $2,000 for the extended warranty (lifetime of a car, unlimited mileage).
Car has not been used for business of any kind - personal use only.
Chrysler officially has a clause in their warranty that they can buy me out if the cost of repairs exceeds the current market price of the vehicle. The buyout consisted of them giving me a check for the cost of the vehicle ($9,400) and I get to keep the car but my warranty is no longer valid.
I hope this makes my situation more clear. The question is - do I report $9,400 on my tax return as a taxable income? Again, I didn't sell the car - it is fully functional and is in my possession. All that transpired is that Chrysler bought me out of the warranty contract because they already paid out much more than I paid for the warranty and they want to cut their losses.
