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Wells Fargo Remediation Check

I received a Wells Fargo remediation check for a vehicle that was illegally repossessed by Wells Fargo several years ago.  Is this payment taxable?  Does it need to be reported when I file income taxes for the year?

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Wells Fargo Remediation Check

That depends on what you did with the repossession, if anything.  If it was a personal vehicle, and you did not report it in any way on your tax return at the time, then the check is only taxable if it is more than the amount you paid for the vehicle (the difference is taxable income).  If it was a vehicle used partly or wholly for business, you have to consider the depreciation you took or could have taken.  Did you write the vehicle off (fully depreciate it) when it was seized, or was it already fully depreciated due to section 179 or bonus depreciation?  Then the check is taxable.  If the vehicle was partially depreciated, then the check is taxable if if is more than your adjusted cost basis in the vehicle at the time of the seizure.  

 

Also, apart from the value of the vehicle, if any part of the check includes punitive damages or interest, those portions are taxable.  

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