Selling Car - Adjusted Cost Basis

[Mcb050032]

If I paid car taxes and deducted them on Schedule A as itemized deduction, if I sell the vehicle next year, are the taxes I paid and that I deducted included in my adjust cost basis when I sell the vehicle?

I.e. paid 80,000 for the car deducted 2,000 car taxes as itemized deduction and sold car following year for 90,000 - would the cap gain be 90k - 82k = 8k or 90k - 80k = 10k ?

[DianeW777]

No, you include your cost of the vehicle, including sales tax.  No amount of personal property tax is added to the cost basis when a vehicle is sold. Cost basis in your example is $80,000.

One thing to remember for tax purposes is that a deduction that reduces income, if applicable, would reduce your cost basis if it were in relationship to a business or rental activity, as example.  This is not the case for personal property taxes.