Please clarify. "I sold a business car to Carmax". In your other post you said it was a personal vehicle partly used for business.
Most of the time, when you use a personal vehicle partly for business, and sell it used, you have a non-deductible loss, even when taking into account the depreciation that you claimed as a car expense (if you used the standard mileage method, that includes depreciation).
If you receive a 1099-MISC from the buyer, the sales proceeds are non-taxable. You can deal with this in one of two ways.
1. Add the 1099-MISC as income to your tax return (personal, not business income). Then go to the other uncommon income section and create an item of income with a negative amount to offset the 1099. Call it "adjustment for non-taxable 1099" or something similar. The IRS may send you a letter asking for an explanation so save all your records for at least 3 years.
2. Don't include the 1099. Print your return and file by mail. Attach a copy of the 1099 and a letter of explanation why it is not taxable. Don't send complicated proof, just a simple letter of explanation and the IRS will ask for proof if they want it. Save copies of your proof for at least 3 years in case the IRS asks. You can't e-file using this method.
If the Business owned the vehicle, you handle this differently. The 1099-MISC may be income to the business, depending on how and how much you depreciated the car when you placed it in service with the business. You will need to provide more details.
