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YaYa_taxes
Returning Member

Totaled Vehicle

In 2018 I have an accident in which my insurance company totaled my vehicle.  I still lowed money on the loan (gap insurance was not available when I purchased it).  I have a loss of what I owed LightStream Loans.  I had to purchase a new vehicle and now owe on a new loan.  How do I claim the vehicle loss and the sales tax for the new vehicle?  

3 Replies
MinhT1
Expert Alumni

Totaled Vehicle

This would have been a casualty and theft loss up to tax year 2017.

 

The tax treatment of personal casualty losses and thefts is changed under the Tax Cuts and Jobs Act. Pursuant to the TCJA, the itemized deduction for personal casualty and theft losses is temporarily limited in tax years 2018 through 2025 solely to losses attributable to federally-declared disasters.

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Grimes_MG
Level 1

Totaled Vehicle

What about if you had a loan on a car that was used for business and was totaled? My car was deemed "totaled" and I received a settlement from the party-at-fault's insurance company. I then took the settlement and payed the remaining loan amount which left me a little less than 1/4 of the total amount paid to me. I then took that 1/4 and bought a used car (to be used partially for my business and partially for personal use). How do I report that instance? Do I only report the 1/4 amount since I really didn't realize the entire payoff since I owed money to the bank? Could I just simply everything and tell TT it was traded-in?

 

 

 

Critter-3
Level 15

Totaled Vehicle

You have 2 separate situations here ... you "sold" the car to the insurance company for what they paid out  and then  you bought a new car.  What you owed on the old vehicle is immaterial on an income tax return. 

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