The IRS and selling personal cars???

[rafbody]

Hey Mark,
I asked a friend who works for the IRS about having to pay capital gaines on selling a car and here is what she sent me.
Yes, he would have to recognize the gain on the sale using Schedule D of Form 1040. The original cost of the car plus the cost of any repairs or improvements made by the guy would be the basis of the car and the gain recognized would be the sales price minus this basis. If the guy intends to add repairs and improvements to the basis of the car I suggest he have proof of the cost of those improvements.

[SamLBInj]

[ QUOTE ]
Nope...bills of sale haven't even been discussed yet - we never got that far. In fact, this is the second time in recent months were the seller has wanted to be paid all or most of the amount in cash because of the "IRS". Obviously, this is difficult to do long distance, so it causes me a problem. Personally, I really don't think the profit generated by the car would be of much consequence to either the owner or the IRS, so I really don't understand the concern.

Sam, when you find a nice '67 Z for $35,000 please let me know - I'll take two!

[/ QUOTE ]
I was guessing that you were dealing with that guy that wants to swap a 69 Z/28 for the 67 Z/28...I didnt want to type in what the car should sell for in case the other guy did not know and was reading this, but you basically just told him his car is worth 75K. ..I always have a cryptic message in all my posts, and you have to read between the lines. By doing this I'm slowly brainwashing everyone into selling me their Yenko camaros for 5 grand
Sam

[MotownMadman]

The IRS is very much aware of the value of collector cars and has been for quite some time. A few years back I took a 66 BB Vette to Bloomington for judging, that show has a car coral of a great number of upper end Corvettes for sale, I was in disbelief when I noticed that the IRS had a booth set up right on the premises to record all Corvette sales as far as who was selling, buying, and the amount of money involved in each transaction. Income tax can be a repetative situation, my parents owned and operated a upper scale antique business for years, when dealing with previously owned items the tax man can benefit repeatedly. One piece of antique furniture can be resold dozens of times to different owners, each time taxes must be paid if there is a profit over investment.The same is true with cars, Money Made, Money Paid. Previously owned items should not be taxed repeatedly, even worse on the high end the seller has to pay tax on income, the buyer has to pay a luxury tax. They get you coming and going. American Beauracracy at it's finest. However, things could be worse, Garnet M20, how is the tax structure in England?
Motown

[MGINLA]

In the United States all gains from Hobbies are taxable. The losses from hobbies are not deductible. There is no longer a $17,500 limit. On another note in California you are charged Sales Tax on the full purchase price reguardless if it is a used car. "Born free taxed to death" Mark the reason they want cash is because it is harder to trace. By the way did you get the Corvette you are looking for?

[Zedder]

Sam,

Stop talking in code that I don't understand No, it's not that car. In fact, I sent that guy an email and never got a response from him??? Did you? As for $75K - I said I'd buy 2 for $35K each, but I doubt I'd spend $75K for one unless is was truly phenomenal. To the best of my knowledge, the most one has actually sold for has been about $60K. However, there have been a number offered for more than that. Coincidentally, a guy contacted me yesterday that has a nice Blue RS Z that he is interested in selling. When I asked how much, he said he had no idea what they are worth and asked my opinion. I hear this same comment over and over again regarding these cars. I guess not enough of them change hands for people to get a feeling for the market.

M: Been hot for two Corvettes recently so I'm not sure which you are referring to. One turned out to have a problem with the paperwork and the other sold while I was trying to get someone to inspect it for me. No big deal, I am willing to wait for the right car.

Matt: Want to talk about taxes? I pay 15% of the declared value for any car that I bring into Canada!

[Zedder]

Thanks Russ...I appreciate you checking that out for me. BTW, did that fellow ever contact you?

[Jeff H]

I wouldn't have a problem paying tax on a profit since it's basically the same as income.

[SamLBInj]

[ QUOTE ]
I wouldn't have a problem paying tax on a profit since it's basically the same as income.

[/ QUOTE ]
You would if you got bumped into the top bracket
Let say you are married and making 50K a year, You sell that 500 original mile 69 ZL-1 camaro you bought back in 1972 for 3 grand for 700k and make a 697K profit...Then tax becomes substantial and the tax man comes licking his chops You could buy a Yenko for what you would be paying in taxes Now on the other hand, you could be sneaky and have a second bill of sale for $3,500.00 but if you get caught you will be best friends with some guy named Bubba and playing house in his little 6x8 room
I say Legalize drugs, control them, opens lots of rehabs and tax the ship out of it like tobacco and well never have to pay income tax again Be sorta like reliving the 60's all over again
Sam

[NEW]

TAXES in Norway!.

On all cars older than 30 years we pay 24 % tax on the invoice value, in addition there is a one time only tax for all cars coming in to the country regardless of age, on abt. 1000 US$.

On cars as new as for example the Hot Rod Camaro i bought last year, sticker price abt. 45K, add. 24%, plus if i want to have plates for registration, add 70KUS$, and this is true!!!

A new C5 Corvette is costing just about 185 K US$,

I have dealer plates, so i do not put registration plates on my cars, this lets me pay only 24% on the invoice value..

Our IRS is way harder on us, than yours!!


NEW

[SamLBInj]

[ QUOTE ]
TAXES in Norway!.

On all cars older than 30 years we pay 24 % tax on the invoice value, in addition there is a one time only tax for all cars coming in to the country regardless of age, on abt. 1000 US$.

On cars as new as for example the Hot Rod Camaro i bought last year, sticker price abt. 45K, add. 24%, plus if i want to have plates for registration, add 70KUS$, and this is true!!!

A new C5 Corvette is costing just about 185 K US$,

I have dealer plates, so i do not put registration plates on my cars, this lets me pay only 24% on the invoice value..

Our IRS is way harder on us, than yours!!


NEW

[/ QUOTE ]
What do you mean "add 70K for Plates"? Holy Snikees!
Damn, thats down right theft...How much does a Volvo cost you?
Sam