Re: Paying cap gains on car sale

I recently bought out my car after leasing it for 3 years. I paid 20K in lease payments over the life of the lease and bought out the car for 27K. I am now going to sell it for 40K. Do I have to pay capital gains tax on 13k difference in purchase price and sale price or does the lease payment count towards what I have invested in this car?

posted

You do not report the sale of the personal vehicle since you purchased the vehicle for $47k and are selling it for less than the purchase price.

was the vehicle used in business whereby you deducted all or part of the lease payments? was the lease really a lease/purchase contract?

It was a personal vehicle. It was a standard lease, not sure if that typically also includes a purchase contract but every lease I have ever had always gave an option to buy at the end.