Car buyback

My car was bought back because of lemon law by the manufacturer. I got all down payment and payments back for the year. Is that money taxable this year?

posted

Hi Staceys411,

Glad you were able to recoup your money. Since you paid for the car with after tax dollars (in other words, you have already paid taxes on that money when you earned it), these funds are not liable for taxation on your return this year.

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