Capital gain example: Buy something for $10, sell for $12. You have capital gain of $2. Your basis in a vehicle is the amount paid minus depreciation due to business use. If you used actual expenses, you can add the total depreciation taken each year. If you took the standard deduction, part of it was considered depreciation. For 2020, it was 27 cents per mile driven. For 2019, 26 cents per mile. For 2017 and 2018, 25 cents per mile, 2016 was 19 cents per mile. You can google IRS mileage depreciation if you need more years.
Example: Paid $10,000 for car in 2019. Drove it 5,000 miles for work in 2019 and took standard deduction for mileage. 5,000 miles x 0.26=$1,300 write off for depreciation which reduces your basis. Sell car January 1,2020. Basis in car is $10,000 paid -$1,300 depreciation = $8,700 basis.
Sell the car for $9,000. You made $300, capital gain.
Sell the car for $8,000. You lost $700, capital loss.
See: What is a capital gain or loss?
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