@cherryiss wrote:
Does it matter if I kept the car or not?
I got a buyback settlement for $73,000 and the original cost of the lemon was $55,000. It's a buyback so I had to return the vehicle. So the result is that I had to use that money to replace my original vehicle, which actually cost more due to market conditions and inflation (exact same vehicle).
Is the cost of replacement taken into consideration? If so, how is that entered into TurboTax?
Thanks.
You bought a car for $55,000 and you sold it for $73,000. That's a capital gain transaction, you have an $18,000 gain that you report on Schedule D, and the gain is taxed as either a long term or short term gain, depending on whether you owned the care more than 1 year or less than 1 year.
It doesn't matter what you did with the money after you got it.
