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rosenbergalex
New Member

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

In Form 4979 "Disposition of Depreciable
Property"  it says "loss from the sale of... property ... is a capital loss. Report the loss on Form 8949 in Part I. "
I bought a car for $3500 and sold it for $1500 same year.  Should I be filling out form 8949?

Thanks.
1 Best answer

Accepted Solutions
DoninGA
Level 15

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

A loss on the sale for this investment property would be reported on Schedule D and on Form 8949 as a short term capital loss and on Form 1040 Line 13.  It is not property to be depreciated and reported on a Form 4979.  To report the sale and the loss you will need to upgrade to the Premier online edition.

To enter an investment sale other than from a brokerage account (1099-B), follow the steps below.

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Wages and Income (Personal Income using Home and Business)
  • Click on I'll choose what I work on (if shown)
  • Under Investment Income
  • On Stocks, Mutual Funds, Bonds, Other, click the start or update button

Or enter investment sales in the Search box located in the upper right of the program screen.  Click on Jump to investment sales

On the next screen, click Yes

On the next screen, click No

On the next screen, choose the option that pertains to the type of investment sale you are reporting and continue with the section until it completes.

View solution in original post

7 Replies
DoninGA
Level 15

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

Is this a personal vehicle, not used in a business?
rosenbergalex
New Member

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

Thank you for the prompt response. Not a business. As quoted above from form 4797: "loss from the sale or  exchange of depreciable property NOT USED IN A TRADE OR BUSINESS but held for investment or for use in a not-for-profit activity is a capital loss"
DoninGA
Level 15

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

Was the vehicle purchased as an investment, like a vintage vehicle to be restored and then sold?  Or was this just your personal vehicle that you sold after a few years of ownership?
rosenbergalex
New Member

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

I purchased an old used vehicle in order to fix it up and sell it at a higher price. However, I realized that the original seller had not reported critical issues with the transmission. I could not fix them. As such, I could only sell the car for $1500 at a loss. The car was both bought and sold in 2017. As such, I purchased the vehicle as an investment, but the investment did not pay off.

If it helps, the fair market value of the vehicle on Kelly Blue Book is $3500.
rosenbergalex
New Member

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

Thank you, DoninGA. You answered my question.
DoninGA
Level 15

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

A loss on the sale for this investment property would be reported on Schedule D and on Form 8949 as a short term capital loss and on Form 1040 Line 13.  It is not property to be depreciated and reported on a Form 4979.  To report the sale and the loss you will need to upgrade to the Premier online edition.

To enter an investment sale other than from a brokerage account (1099-B), follow the steps below.

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Wages and Income (Personal Income using Home and Business)
  • Click on I'll choose what I work on (if shown)
  • Under Investment Income
  • On Stocks, Mutual Funds, Bonds, Other, click the start or update button

Or enter investment sales in the Search box located in the upper right of the program screen.  Click on Jump to investment sales

On the next screen, click Yes

On the next screen, click No

On the next screen, choose the option that pertains to the type of investment sale you are reporting and continue with the section until it completes.

rosenbergalex
New Member

Can I claim the following as a capital LOSS on line 14 of 1040? I sold a car for $2000 less than purchase price. In form 4797 instruc p2, it calls this a capital LOSS

Thank you. Clear.
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