Are you thinking about selling your car in Jacksonville? If so, you've likely found yourself wondering if the sale of your vehicle counts as income for the purposes of filing your taxes. Is selling your car the kind of thing you have to report? In general, the answer is no, but it can depend on the situation. As long as you don't turn a profit on the sale of your car, you don't need to report it. If you do end up getting more for your car than you paid for it, it becomes a different story. Here's a quick overview of what you need to know.

Do I need to report the sale of my car to the IRS?

If you sell your car for profit, then you do need to report the sale on your tax return. This is typically not the case because most drivers will end up selling for quite a bit less than what they paid because of the nature of depreciation. However, if you made significant upgrades to your vehicle, you could find yourself in a situation where you could sell it for more than you paid for it. In those cases, you would need to report it.

If you sell your car at a loss, you don't need to worry about it. Selling a car for less than you paid for it is considered a capital loss by the IRS, so you don't need to report it. Broadly speaking, sold goods aren't taxable income unless you sell them for more than you paid for them.

So, selling my car doesn't count as income?

Nope. Not unless you turned a profit. For example, let's say you paid $20,000 for a car and sold it for $10,000. That's considered a capital loss and not something you need to report.

If you bought a car for $3,000, improved it, and sold it for $10,000, then that would be a capital gain, which you would need to report when filing your taxes.

What if I have questions?

Buying cars is our specialty, so we can help if you have questions about selling yours here at Duval Buys Cars serving Orange Park and Ponte Vedra Beach. Drivers from St. Augustine to Gainesville, FL and beyond can count on our experts to lend a hand. Reach out today to connect with our team or schedule an appraisal!

Categories: Finance