Deduction and loss

[vetdefender]

I have two questions. First, I sold my car and the dealer gave me a $7,000 credit towards my new car. Do I have to record the 7K as income?

Second, an uninsured motorist hit me and as a result, I suffered a loss (repairs, medical, etc.) Where can I claim this loss on my taxes? 

Thank you. 

[DoninGA]

If the $7,000 you received from the dealer for the old car was less than you originally paid for the old car then that is not reported on a tax return.  A loss on the sale of personal property is not reported on a tax return.

Casualty and Theft losses are not deductible on tax return unless the loss occurred due to a federally declared disaster.

However, any medical expenses you incurred and were paid with out of pocket funds and Not reimbursed can be claimed as an itemized medical deduction on Schedule A.

[Opus 17]

You have a taxable gain if you sell the car for more than your adjusted cost basis.  In most cases, your cost basis is what you paid originally, so you only have a taxable event if you sell for more than the purchase price.

However, using the car in business and taking a mileage deduction or actual expense deduction include depreciation, which reduces your cost basis (because you are deducting part of the price of the car as a business expense).  If this car was used in business, you may need to perform a calculation to determine if any of the sales proceeds are taxable. 

[DanaB27]

No, as DoninGA mentioned, you do not have to include the $7,000 credit that you received for selling your private car as an income if the original purchase price of the old car was more than $7,000. 

You cannot claim the loss of property. Only losses as a direct result of a natural disaster, and you live in a federally declared disaster area might be deductible. Please see What if I have property that was lost or damaged (a casualty loss)? for additional details.

If you are able to itemize instead of using the Standard Deduction then you might be able to claim your paid medical expenses. Please see What kinds of medical expenses are deductible? for additional details.

Standard deductions for 2021 

• Single - $12,550 add $1,700 if age 65 or older
• Married Filing Separately - $12,550 add $1,350 if age 65 or older
• Married Filing Jointly - $25,100 add $1,350 for each spouse age 65 or older
• Head of Household - $18,800 add $1,700 if age 65 or older

Please see What's my standard deduction for 2021? for additional information.