topic Overpayment of repo'd car loan in Get your taxes done using TurboTax

Overpayment of repo'd car loan

silvarea20042003 — Fri, 10 Jan 2025 01:12:34 GMT

My vehicle was repossessed and sold at auction for more then I owed. 2 years later they sent me the overpayment check.

No 1099-c was created since the debt was technically paid in full between the fiction sale and what I had paid.

Is the refund considered taxable income?

No other regular income

Re: Overpayment of repo'd car loan

Opus 17 — Fri, 10 Jan 2025 01:27:25 GMT

That depends. You would treat this as the "sale" of the car for the amount of the debt plus the overage they sent you. Sales of personal property for less than your cost basis is not taxable. Cost basis is generally what you originally paid. However, if the property was used in business (such as for ride share), then you have to adjust the cost basis by the amount of depreciation you could have taken, even if you didn't claim depreciation. Was this care ever used in business? We can take you through those steps. If not, it's not taxable unless the total amount of the "Sale" was more than you paid for the car.

Re: Overpayment of repo'd car loan

silvarea20042003 — Fri, 10 Jan 2025 02:46:34 GMT

Thank you.

It was not used for business and is definitely less than the original price