The answers to your questions are shown below for the sale of your leased car. First you must determine what you actually paid for the leased car. This would include any down payment, lease payments inclusive of sales tax.
Q1. Is the $10,000 payment to me taxable? Any gain after arriving at your cost basis will be taxable to you.
Q2. If so, is it a long term capital gain or a short term capital gain? The holding period (greater than one year) will provide long term capital gain.
Q3. If a capital gain, do I have any tax basis in the car reportable on Schedule D? Yes, see the information above.
Q4. If ordinary income, how would I report it? This is not ordinary gain, see Q2.
Q5. Do I have any further sales tax liability associated with the above scenario? The answer to this will come from CarMax or the origin leasing company.
Q6. Or does CarMax have a sales tax liability with its purchase of the car? Again, this information must come from CarMax.
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