topic Where do I report income from selling a car? in Deductions & credits

Where do I report income from selling a car?

kem8002 — Thu, 06 Jun 2019 09:44:49 GMT

It depends. This personal property sale is considered th...

DS30 — Thu, 06 Jun 2019 09:44:51 GMT

It depends.

This personal property sale is considered the sale of a capital asset. You will need to determine the basis in the car in order to determine if you has a capital gain (reportable) or a capital loss (not reportable). So if your cost for the car plus the cost of any improvements is more than you sold it for, then you have a personal capital loss and that is not reportable or deductible on your tax return.

If your total costs are less than what you sold it for, you would have a personal capital gain and you would need to report it on your tax return in the year of sale

To enter this transaction in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return")and type "investment income (gains and losses)" in the search bar then select "jump to investment income (gains and losses)". TurboTax will guide you in entering this information (see step 6 below)

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
Next click on “I’ll choose what I work on”
Scroll down the screen until to come to the section “Investment Income”
Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
The first screen will ask if you sold any investments during the current tax year (This includes any sale of personal property held as an investment property so answer “yes” to this question)
Since you did not receive a 1099-B, answer “no” to the 1099-B question
Choose the type of investment you sold - Personal Items

Some basic information:

Description – type of vehicle
Net Proceeds – Total amount received for the property less eligible selling expenses (if any)
Date of Sale – Date you sold the vehicle

Tell us how you acquired the property
Any Business or Rental Use - If the vehicle was used for personal use only, you will not be able to deduct the capital loss since no capital loss is allowed for a personal use capital asset.
Enter Cost Information:

Date Acquired – Date you purchased the vehicle
Original Cost – Cost of vehicle plus any capital improvements

Click these links for further information about reporting the sale of a capital asset or Capital Gains and Losses

Re: It depends. This personal property sale is considered th...

tiredbaily — Mon, 22 Mar 2021 15:57:57 GMT

Why would you go through investment and not go to the vehicle tab under the business? I sold a car that I had been declaring on my side jobs for 4 years. I have 3 side jobs. Do I report the sale on each of the side jobs or just one? Does it make a difference if I reported the actual cots or took the standard deduction? I have talked to 4 different advisers and keep getting different answers.

Re: Where do I report income from selling a car?

DaveF1006 — Mon, 22 Mar 2021 22:04:17 GMT

It depends. Do you have a business or do you report rental income?

Re: Where do I report income from selling a car?

Rann1961 — Sun, 10 Jul 2022 17:11:24 GMT

I want to make sure I understand correctly. I am planning on selling my car because I can get more for it than my dealer has offered for a trade in. When I go to investment income like you said and enter my information what it will sell for and what I originally paid for it 9 years ago (cost or other basis) and holing period I put long term. It does show a Capital Loss even though it was for personal use which it did not ask if it’s personal or business. Basically I am selling my car to buy a new one but both are for personal use. Just want to make sure I understand this correctly and not be surprised by owing a huge tax next year. Because if that will happen it may be better to trade in versus to sell it. Although, I have been offered $7,000 more to sell it than to trade it.

Re: Where do I report income from selling a car?

VolvoGirl — Sun, 10 Jul 2022 17:17:17 GMT

Unless you are selling it for more than you paid for it, you don't report personal losses on your tax return. Don't enter it at all. You can't take a personal loss on your tax return.

Re: Where do I report income from selling a car?

Rann1961 — Sun, 10 Jul 2022 18:11:02 GMT

But when I enter all the information in TurboTax using the instructions above it automatically creates the Capital Loss. It does not asked if it was used for work or personal use. It’s my personal car that I am wanting to sell and will use most of the money to buy a new vehicle. What they offered on a trade in was a lot lower than what I can sell it for. I read somewhere that if you sell the vehicle for less than what you originally paid for it then you do not have to claim it but I want to make sure. Want to do what I am supposed to upfront the correct way. I have TurboTax Deluxe and have been just seeing how it would work out and like I said it automatically creates the loss.

Re: Where do I report income from selling a car?

Critter-3 — Sun, 10 Jul 2022 18:52:07 GMT

Sounds like you missed this screen where you indicate it as personal property so the loss is not allowed ...

Re: Where do I report income from selling a car?

VolvoGirl — Sun, 10 Jul 2022 19:04:47 GMT

The point is.....you do not enter it in the first place. Nothing to enter about it. You don't report it. Delete it.

Re: Where do I report income from selling a car?

Rann1961 — Mon, 11 Jul 2022 01:18:25 GMT

That screen never came up and I have tried it again and it still doesn’t come up. I have the deluxe edition don’t know if that matters or not. I did it just the way it was explained in the first post above which is more for investments that I can tell. I just want to make sure I do this right and not get in trouble for not reporting if I am supposed to.

Re: Where do I report income from selling a car?

Rann1961 — Mon, 11 Jul 2022 01:19:33 GMT

So you don’t report when you sell a car? I am confused some say yes and some say no.

Re: Where do I report income from selling a car?

VolvoGirl — Mon, 11 Jul 2022 01:22:53 GMT

Not if was for personal and a loss. Only if you used the car in a business.

Re: Where do I report income from selling a car?

Critter-3 — Mon, 11 Jul 2022 02:45:29 GMT

If you got no tax reporting form for a loss on a personal use property you are not required to report the sale however you can report the sale if done so properly.

Re: It depends. This personal property sale is considered th...

drsieling — Wed, 11 Jan 2023 21:42:51 GMT

There is no option for personal property.

Re: It depends. This personal property sale is considered th...

CatinaT1 — Wed, 11 Jan 2023 21:59:14 GMT

Can you clarify what your question is?

Re: It depends. This personal property sale is considered th...

drsieling — Wed, 11 Jan 2023 22:45:08 GMT

I was trying to put income from a personal sale of a car and above it said select personal but there is no option to select personal.

Re: It depends. This personal property sale is considered th...

BillM223 — Thu, 12 Jan 2023 00:02:06 GMT

Do you actually have a gain from the sale of a personal car? Most people don't.

This is because their "basis" (what they put into the car in the first place) is almost always more than what they sold it for, so no gain. I.e., sale price less purchase price is less than zero. It does not matter what your car loan value was.

If you did not have a gain from the sale, then do not report the sale on your tax return.

Does this cover your situation?

[Edited 1/11/2023 | 4:01 PM}

@drsieling

Re: It depends. This personal property sale is considered th...

drsieling — Wed, 11 Jan 2023 23:48:35 GMT

Yes, thank you.