bschomske
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I 'm in the process of selling my car..Does the sale have to be reported as income? I put alot of money in the car and think I did not make money on the deal...thanks everyone in advance...
sold car now what!
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If you do a check or wire transfer, no sweat. No one's going to know anything about the sale unless you claim it on your taxes. With all the billions of dollars that exchanges throughout the country on a daily basis, your transaction wouldn't even cause a blip on anyone's radar screen.
However, if you get cash, just get one of those marker pens to verify that you aren't getting any funny money. And, if you do get cash and want to deposit it into your account, deposit it in less than $5,000.00 increments every few weeks.
However, if you get cash, just get one of those marker pens to verify that you aren't getting any funny money. And, if you do get cash and want to deposit it into your account, deposit it in less than $5,000.00 increments every few weeks.
Structuring deposits under $10k is illegal and will get you into hot water with the IRS. If you sell it for less than the improvements made to it it is considered a capitol loss so it is not taxable. If sold for a higher amount (profit) then if would be taxable under capitol gains.
FrnkNsteen
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I would say talk to a tax rep to confirm, but I don't think you have to claim it unless you sell enough cars a year to be considered a business. I have never heard of anyone having to claim selling their car on their taxes. Usually because it is so rare to get enough back on the sale to cover your expenses you put into it. Usually we end up selling at a loss.
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Assuming cash is in the deal, what's the problem with depositing "small" amounts at a time? Unless it's a Hemi or a Six Pack car, we're probably talking 40 large or less.
rlem1977
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Should not be a problem unless you're running you car resto's as a business. Then you should have receipts for everything so you can show a legit profit or loss. But I suspect that is not the case with you. You can consult a tax accountant just to make sure. I'f you're going to take a cashiers check, do all you can to make sure it's legit, a lot phony ones being passed. Hold the title, whatever, until it clears. Or just accpet cash and get one of those verifying devices RC mentioned. Maybe do the transaction at your bank so you can have the bank validate the check/bills. And yes, structuring deposits can be an issue. I have friends that are bankers and we discussed this issue. Banks look for trends. Several deposits over time an be an even bigger red flag. Thus the issue with fiat currencies. good luck.
dukeboy_318
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Its one of the triggers that the IRS look at for tax evasion. By law, and deposits over 10,000 USD have to be reported to the IRS, multiple deposits under $10,000 that are outside of paychecks and done via cash, and are larger than 1000 have to be reported as well.
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$1,000.00......I thought $5,000.00 was the triggering figure?
That is called structuring. What is the purpose of depositing in small amounts as opposed to one, larger amount? Deposits over $10k require the banks to inform the IRS because it's written into the tax code. Believe me if you make several deposits just under the $10k amount in a certain period they will look into why. The only reason to structure is to get around the reporting requirement.
It's $10,000
dukeboy_318
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nope. Matter of fact, banks can report ANY and ALL cash deposits they deem to be a suspicious pattern. Most do.
wasco
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What about pulling 9000 out of savings to buy a car, then selling another car (or the same one) for 13000 and depositing that within the same year? Are only deposits a trigger? Seems like they should also be monitoring withdrawals as well? I guess if taxing income is their only goal, then they wouldn't be concerned with withdrawals.
fratzog lover
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Yeah. Heaven forbid we remind the govt it's our money, not theirs. lol
rlem1977
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Under the guise of "ill-gotten gaines", you know, money-laundering. They "may" want to know the source of your money, to make sure nothing nefarious is afoot.
bschomske
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thanks everyone for there comments..I just have never sold a car before that is a muscle car that I have had for 23 years..Alot of blood sweat and tears...Oh yera and a ton of money to get it to this stage...
Darius
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Bottom line is if you can show you got less for it than you have in it it will not be income. IF you get audited that is.
65-440
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I've always done $8k every other week, never had an issue .. or get a certified check and be done with it ... we pay enough taxes as it is
TxDon
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You should always keep good records on how much you spend on a project car, including things like registration, sales tax and insurance, this total cost is considered it's "basis". If you owned the car for more than a year it is considered an investment, if you sell it at a profit over the basis you are liable for taxes on the capital gain but if you sell at a loss you can write off the capital loss on your taxes. There is a $3000 yearly cap on the writeoff but you can carry it over to multiple years. Talk to a tax professional to verify your specific situation.
JB400
69 Charger
If in doubt, cover your butt and report it
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