We received a (nice) used car as a gift years ago and sold it last year after about 6 years of use. Some things I've read suggest I can take a capital loss deduction based on the difference between the fair market value at the time we received it and what we sold it for. I'm not 100% secure about this. Anyone know?
Cars depreciate significantly over 6 years. On the surface, it doesn't make sense to me that one could take a capital loss based on the car's value 6 years earlier. But I'm not saying that based on any tax knowledge.
Sort of agree. It doesn't seem o be something people think to do when they sell cars they bought. But if you Google it, you'll find stuff, including IRS stuff, about the tax basis of gifted property for determining gains and losses on sales. I don't know.
Just saw this in an IRS doc:
"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible."
Yup, personal use is the key here.
I've always used our cars partly for business (and deducted driving related expenses). Wondering if that changes anything (though I suppose if you get to deduct car use as an expense, even a partial capital loss on sale might be double counting).
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