06-14-2021, 02:50 PM
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#1
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Banned
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Join Date: Nov 2017
Location: Bay Area, CA
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Real Name: Mark
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Banned
Join Date: Nov 2017
Location: Bay Area, CA
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Real Name: Mark
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UH OH, Taxes on 4Runner Sale?
In this crazy car market, for everyone who has sold your 5th Gen vehicle for a profit, or thinking about it, have you considered the tax implications?
If you make a profit it is a capital gain and has to be reported on your income tax return, and tax paid.
I have not seen any discussion of this in the forums.
Does this affect your decision to sell?
Your Income Tax and Selling a Used Car | DMV.ORG
What to know about taxes when you sell a vehicle - Carvana Blog
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06-14-2021, 03:10 PM
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#2
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Senior Member
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Join Date: Mar 2010
Location: denver
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Senior Member
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Quote:
Originally Posted by ElectroBoy
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What you paid for the car + the cost of after market equipment this is your value. Sell price minus your value = profit and is taxed as capital gains. In most cases the value of the car plus mods usually ends up as a loss or wash and there fore not taxed.
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06-14-2021, 03:40 PM
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#3
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Join Date: Jan 2017
Location: Staunton,VA
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Real Name: Michael
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Member
Join Date: Jan 2017
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Quote:
Originally Posted by spartacus
What you paid for the car + the cost of after market equipment this is your value. Sell price minus your value = profit and is taxed as capital gains. In most cases the value of the car plus mods usually ends up as a loss or wash and there fore not taxed.
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This whole thing is asinine. The govt does view vehicles as capital. So if you sell the vehicle for more than you paid plus “invested” you have capital gains and “should” report it. (How would they ever know…?) But if I buy a car, sell it 6 months later for a loss, I should in theory be able to report it as a loss, correct? How much time can elapse before reporting the loss? Can I buy a car for $40k and sell it 5 years later for $25k and show a loss of $15k on my taxes…?
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2016 MGM TEP w/KDSS - P285/70-17 Toyo Open Country AT3 on Stock Trail wheels, no spacers - Dobinsons IMS Lift 2.75”/2” (302/505 Springs) - Freedom Off-road UCAs - TRDP Grill - Redarc Trailer Brake Controller - SumoSprings Helper Spring Bumpstops (black)
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06-14-2021, 04:03 PM
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#4
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Senior Member
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Join Date: Mar 2010
Location: denver
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Senior Member
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Quote:
Originally Posted by BlueRidge77
This whole thing is asinine. The govt does view vehicles as capital. So if you sell the vehicle for more than you paid plus “invested” you have capital gains and “should” report it. (How would they ever know…?) But if I buy a car, sell it 6 months later for a loss, I should in theory be able to report it as a loss, correct? How much time can elapse before reporting the loss? Can I buy a car for $40k and sell it 5 years later for $25k and show a loss of $15k on my taxes…?
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I don't know the answer to your questions. Hopefully someone with a better tax knowledge can chime in.
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06-14-2021, 04:22 PM
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#5
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Member
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Join Date: Jan 2017
Location: Staunton,VA
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Real Name: Michael
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Member
Join Date: Jan 2017
Location: Staunton,VA
Posts: 168
Real Name: Michael
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Quote:
Originally Posted by spartacus
I don't know the answer to your questions. Hopefully someone with a better tax knowledge can chime in.
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No worries. It was somewhat a rant and not directed at you. The idea of of paying capital gains on a few thousand from the sale of a car is sickening to me. Especially when you are probably barely covering your sales and use tax which in my opinion should be part of the cost to establish capital gains…
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2016 MGM TEP w/KDSS - P285/70-17 Toyo Open Country AT3 on Stock Trail wheels, no spacers - Dobinsons IMS Lift 2.75”/2” (302/505 Springs) - Freedom Off-road UCAs - TRDP Grill - Redarc Trailer Brake Controller - SumoSprings Helper Spring Bumpstops (black)
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06-14-2021, 04:53 PM
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#6
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Senior Member
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Join Date: Mar 2010
Location: denver
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Senior Member
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Location: denver
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Quote:
Originally Posted by BlueRidge77
No worries. It was somewhat a rant and not directed at you. The idea of of paying capital gains on a few thousand from the sale of a car is sickening to me. Especially when you are probably barely covering your sales and use tax which in my opinion should be part of the cost to establish capital gains…
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I hear you. The tax code is complicated to say the least.
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06-14-2021, 05:05 PM
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#7
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Senior Member
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Join Date: Aug 2017
Location: Kansas City
Posts: 1,600
Real Name: Howard J. Turkstra
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Senior Member
Join Date: Aug 2017
Location: Kansas City
Posts: 1,600
Real Name: Howard J. Turkstra
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Quote:
Originally Posted by spartacus
I don't know the answer to your questions. Hopefully someone with a better tax knowledge can chime in.
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You cannot take a loss on a car’s depreciation on your personal tax return. You do have to pay tax on any gain, however.
If your company owns a vehicle, you can deduct depreciation on the vehicle every year based on an IRS table. In this situation, after x years the vehicle is worth $0, and any amount you sell the vehicle for is taxable.
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 2004 Limited V8 4WD 183k miles. Stratosphere Mica paint, Stone interior. Too many mods to list here.
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06-14-2021, 06:46 PM
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#8
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Senior Member
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Join Date: Apr 2021
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Join Date: Apr 2021
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Quote:
Originally Posted by ads2539
You cannot take a loss on a car’s depreciation on your personal tax return. You do have to pay tax on any gain, however.
If your company owns a vehicle, you can deduct depreciation on the vehicle every year based on an IRS table. In this situation, after x years the vehicle is worth $0, and any amount you sell the vehicle for is taxable.
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What about if you have a schedule C?
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06-14-2021, 07:02 PM
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#9
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Join Date: Feb 2019
Location: Texas
Posts: 500
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Uh oh! Uh oh!
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06-14-2021, 07:43 PM
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#10
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Senior Member
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Join Date: Aug 2017
Location: Kansas City
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Real Name: Howard J. Turkstra
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Senior Member
Join Date: Aug 2017
Location: Kansas City
Posts: 1,600
Real Name: Howard J. Turkstra
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Quote:
Originally Posted by 2021nightshade4x4
What about if you have a schedule C?
Sent from my iPhone using Tapatalk
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You can deduct car expenses on a Schedule C.
In all cases, you can only deduct the portion that the vehicle is used for business purposes. So if the use is 50/50 personal/business, you only get half of the deduction.
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2004 Limited V8 4WD 183k miles. Stratosphere Mica paint, Stone interior. Too many mods to list here.
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06-14-2021, 09:06 PM
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#11
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Join Date: Mar 2019
Location: Las Vegas, NV
Posts: 288
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Member
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Quote:
Originally Posted by BlueRidge77
This whole thing is asinine. The govt does view vehicles as capital. So if you sell the vehicle for more than you paid plus “invested” you have capital gains and “should” report it. (How would they ever know…?) But if I buy a car, sell it 6 months later for a loss, I should in theory be able to report it as a loss, correct? How much time can elapse before reporting the loss? Can I buy a car for $40k and sell it 5 years later for $25k and show a loss of $15k on my taxes…?
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Not suggesting what anyone should or should not do, but the IRS is so shorthanded they rarely even bother going after the big fish these days. Only way they would know if you made any profit selling a car is if you volunteer that info.
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2019 TRD Off Road w/KDSS in silver. Dobinsons IMS59-50700 & C59-314 front (coil seats lowered 1/2"), IMS59-50705 & C59-505 rear; Dobinsons diff drop; Ironman UCAs; Eimkeith PCK, Ironman adjustable panhard rod, and Treaty Oak KDSS spacers; Toyo Open Country A/T III 255/80R17; C4 Fab skids & Shrockworks sliders; Durobumps front & rear.
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06-14-2021, 09:30 PM
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#12
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Senior Member
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Join Date: Jan 2020
Location: North of Dallas
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Quote:
Originally Posted by ElectroBoy
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Thanks Captain Obvious.
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2020 4Runner SR5 Premium 4x4
Barcelona Red, Graphite/Grey
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06-15-2021, 03:22 AM
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#13
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Senior Member
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Join Date: May 2017
Location: San Diego, CA
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Quote:
Originally Posted by ElectroBoy
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Nope haha. What the IRS doesn't know won't hurt them. Plus the value of my vehicle which includes my "investment" of modifications is much higher than even the crazy price I could sell it for. It's all the TRD Pro owners that bought their vehicle a year ago and are now selling it for more than they bought it that will have to pay capital gains tax lol.
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Quote:
Originally Posted by RysiuM
I just look at them and say: you have not the absolute slightest idea what you are talking about. This is 4Runner.
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'15 Trail Premium, GOBI Stealth, CVT Summit Awning, ARB Safari Snorkel, TRD Pro susp. w/Bilstein 6112 coils & 1" spacer (front) & OME 895 (rear), 285/70/17 BFG KO2, Spidertrax wheel spacers, TRD Pro package (wheels, grill, valences, & skid), full RCI aluminum skids, C4 Fab diff skid, Toytec bump stop extensions, plenty of lights, patches, stickers, and other miscellaneous mods (backup & front camera, accessory meter display, rear window/hatch, bumper cup holders, Wit's End fire extinguisher mount, Ellis Precision TRD shift lever)
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06-15-2021, 11:44 AM
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#14
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Banned
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Join Date: Nov 2017
Location: Bay Area, CA
Posts: 2,247
Real Name: Mark
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Banned
Join Date: Nov 2017
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Quote:
Originally Posted by Kamalani Mahie
Nope haha. What the IRS doesn't know won't hurt them. Plus the value of my vehicle which includes my "investment" of modifications is much higher than even the crazy price I could sell it for. It's all the TRD Pro owners that bought their vehicle a year ago and are now selling it for more than they bought it that will have to pay capital gains tax lol.
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Yeah, you’re supposed to voluntarily report the profit as a capital gain and share your good fortune with the govt. But if you lost money on the sale IRS says too bad for you. But you don’t even have to report it. Kind of like gambling winnings.
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06-15-2021, 02:38 PM
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#15
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Senior Member
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Join Date: Mar 2021
Location: Canada
Posts: 1,145
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do you americans have to pay taxes on the vehicle price when you register it after purchasing it in a private sale? in canada, the buyer pays taxes when they register the vehicle in their name and get plates. there's a formula to determine the amount of taxes so someone can't just fill in a $1 sale price on the paperwork and avoid taxes. in canada most personal property is not subject to capital gains taxes, that includes vehicles
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