How to report gains through selling a used car?

[cira0000]

I bought a car in 2019 and sold it in 2021. Because of the surge in used car prices, I sold the car for about 3000 dollars more than the price I bought it. Is it a capital gain? How to report it using turbotax?

[AnnetteB6]

Yes, it would be considered a capital gain since you sold it for a profit.  If it was used for personal purposes only or held as an investment, then report the sale on Schedule D as a capital gain.  If you used the car for business purposes on Schedule C or Schedule E, then the sale would first be entered in that section of your return. 

See the following TurboTax article for instructions for entering the sale into your return on Schedule D:

Where do I enter a capital gain or loss? 

[cira0000]

Thank you! How do I report it using TurboTax?

[DawnC]

You will use the Investment Income section to report the gain for non-business related items.  

Open (continue) your return in TurboTax.

• In the search box, search for investment sales then select the Jump to investment sales link in the search results.
• Answer Yes to the question Did you sell any of these investments in 2021?
  • If you land on the investment sales summary screen , select Add More Sales.
• Select Other, then Continue.
• On the next screen, select the Investment Type and continue through that screen.  

For business assets, take the following steps:

• Search for sale of business property (use this exact phrase; copy/paste if necessary) and then select the Jump to link at the top of your search results.
• On the Any Other Property Sales? screen, make sure the first checkbox is checked and Continue to the next screen. 

[cira0000]

Thank you for the answer! I paid 17399.98 dollars for the car in 2019, consisting of the cash value of the vehicle (15125), dealer's service fee of 899, license/REG/TIT of 240, and sales tax of 1135.63. 

What shall I enter for the total amount paid (cost basis)? Shall I deduct the dealer's fee, license or sales tax from it? 

I sold the car to Carvana in 2021 and didn't receive any tax forms. 

[DawnC]

Cost basis includes sales tax and other expenses connected with the purchase.   It does not include the license and registration though, so do not include that fee in the basis.   But the dealer fee and sales tax are part of your cost basis.  

For more information on basis and adjusted basis, refer to Publication 551 and the Instructions for Schedule D (Form 1040), Capital Gains and Losses.