- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
You're correct that a car is a capital asset, and from the information you provided, you sold your car at a loss EXCEPT that a loss isn't deductible on the sale of an asset used for personal purposes. Most of the time, you wouldn't even report the sale, because you would have zero gain, and no deductible loss.
Because this was reported to you on a 1099-MISC, it would be simpler to report it that way.
First, report the amount in 1099-MISC as income, because it's being reported to the IRS.
To report the income:
- Report the 1099-Misc in the Other Common Income section.
- Indicate that it is for the sale of a car, that it does not involve work like your main job, and that it did not involve an intent to make money. The income will be reported on line 21 of your return.
Next, you'll report a negative figure on line 21 of your return to show the cost basis of the car, but only up to the sales price, because, again, you can't claim a loss.
To enter the negative figure:
- Go back to Less Common Income, Miscellaneous Income and Other reportable income.
- Continue to the screen Other Taxable Income. Enter a description, something like "cost basis of personal car" and a negative amount (- 14,500).
You'll wind up with $14500 reported as both a positive and a negative amount on line 21, and the end result will be zero.
**Mark the post that answers your question by clicking on "Mark as Best Answer"