What about if you still had a loan on the car that was totaled? My car was deemed "totaled" and I received a settlement from the party-at-fault's insurance company. I then took the settlement and payed the remaining loan amount which left me a little less than 1/4 of the total amount. I then took that 1/4 and bought a used car for my business. How do I report that instance? Do I only report the 1/4 amount since I really didn't realize the entire payoff since I owed money to the bank?
