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I sold my car in 2016 should i include it in my income tax ?

 
1 Reply
DS30
New Member

I sold my car in 2016 should i include it in my income tax ?

It depends

Personal vehicle -

No - If you have a capital loss on the sale of your personal vehicle (what you sold it for was less than what you originally bought it for (plus any upgrades you made to the vehicle), then you will not report this capital loss on your income tax return. The IRS does not allow you to recognize a capital loss on a personal use asset (your car)

Yes - If you have a capital gain on a personal use vehicle, you will report this as the sale of a capital asset.

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:

  1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
  3. Next click on “I’ll choose what I work on”
  4. Scroll down the screen until to come to the section “Investment Income”
  5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
  6. 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)
  7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
  8. Choose the type of investment you sold - Personal Items
  9. Some basic information:
    1. Description –  type of vehicle
    2. Net Proceeds – Total amount received for the property less eligible selling expenses (if any)
    3. Date of Sale – Date you sold the vehicle
  10. Tell us how you acquired the property
  11. 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.
  12. Enter Cost Information:
    1. Date Acquired –   Date you purchased the vehicle
    2. 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

Business vehicle -

If the vehicle is actually owned by the business, then you would need to report the sale under the business income and expenses section related to business vehicle information.

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