I sold my car this year and paid off the car loan on it. Should I pay taxes on the car sale proceeds ?

Question

The car sale was less than the loan amount I paid off. I am working on y taxes for this year and was ot sure if I should declare this as a source of income and pay tax on it ?

Answer 1

The loan amount has nothing to do with taxes.  You'd only have to declare the sale on your tax return if you made a profit on it, by selling it for more than you originally paid for it.  Except for collector cars, that would be very rare.

Answer 2

did they tell u too?

Answer 3

You only pay taxes on the sale of a personal asset if you recognized a gain.  In determining whether there was a gain or loss on the sale, you consider the amount that you paid for the car, not how much it cost you to pay off the loan (since the loan would also be comprised of unpaid interest, which would be nondeductible).

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Answer 4

if you recieved cash for it, hopefully you wrote it as being sold for a dollar on the bill of sale. otherwise, declare it. declare everything that has a paper trail; it can always potentially come back and hurt you, and thats the type of hurt that doesn't go away for years.

Answer 5

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Answer 6

There is no tax due unless you sold the card for more than you paid for it. The loan amount is irrelevant.