Capital Gains on muscle car (state of PA)

[Zedder]

Marlin, I researched this in 2005 and, in Ontario, there is a clear distinction between losses from capital assets and other "investments". Losses from CA's cannot be deducted against other gains up here. Is this not the case in the US? And if not, why can't one deduct the losses incurred on a daily driver since it is a capital asset also???

[mockingbird812]

"This is why you cannot write off the losses on your daily driver..."

Is there any concession for the individual who bot the car in 196X AS A DAILY DRIVER, and the car simply happened to be one of those cars that increased in value as opposed to the 99% that decrease in value?

[YENKO DEUCE REGISTRY]

[ QUOTE ]
Marlin, I researched this in 2005 and, in Ontario, there is a clear distinction between losses from capital assets and other "investments". Losses from CA's cannot be deducted against other gains up here. Is this not the case in the US? And if not, why can't one deduct the losses incurred on a daily driver since it is a capital asset also???

[/ QUOTE ]

Let's not mix Canadian Provincial Tax Law with the US IRC - the IRC is confusing enough! However, you make a valid point about mixing cap gains on assets vs. investments. I think I stated in my initial explanation that cap assets are tangible personal property (including your 'daily driver'). Commercial paper (ie; investments) are not really considered 'tangible', and are therefore treated differently in the U.S. and apparently in Canada as well.

Chuck,

I purposely used the word 'may' to indicate the possibility of a carryforward of cap losses. I can check into it more if you'd like, I have the IRC publication around here somewhere.....

[Roof]

Guess I should be posting as XRoof Deuce now but will worry about that later. Really appreciate all the info this post is generating. What if part of the profit from the sale is reinvested in another muscle car? Can that be deducted from the gain amount? Linda

[427king]

Ill make one more post and then shut up. You can file to make a "like kind exchange" just like you do with real estate. You must set it up first ,then have 90 days to sell your car and purchase another. You will not pay any taxes on the gain if you flip it into another car of equal or greater value. There are many restrictions so do your home work. You can buy an item of more value and also less value and just pay on the difference in the case of buying a lesser value car. Once the 90 days is up, your done though. Its a great tool if you want to change cars the tricky part is selling your car and buying another in the 90 days,best to work it out with someone whos car you want before you start the clock ticking.

[COPO 70 RS/Z28]

I knew I should have stayed in that Holiday in Express!!!





Great thread guys, Believe it or not this is very interesting stuff!

[YENKO DEUCE REGISTRY]

Be VERY careful with 'Like Kind Exchanges', as non real estate items may only apply to business'. I can check it out if someone really needs to know. I'm sure someone does, so I'll look it up over the weekend.

Let me clarify an earlier post about 'investments'. Investments are actually considered capital assests when held for personal use - stocks, bonds, etc... It's when commercial paper is held for sale to customers, that's not considered cap assests - but more likely 'normal' assets because it's a business.

[firstgenaddict]

what if you have a trust that owns only the car then the buyer has a trust funded with the money to buy the car then you swap the trustee's of them? Technically there is nothing made either way just the control of the trusts?

[John Brown]

The farmers newspaper that I subscribe for the estate auction listings had an article not long ago about the feds tightening the regulations on like kind 1031 exchanges. Seem as they had been lax and were allowing most any type of exchange to qualify. Now they're going to hold the exchanged propertys to really be like kind, example, no trading farm land for apartment buildings, as they had allowed in the past.

1031 exchange rules

Read em before you need em.

[Belair62]

[ QUOTE ]
Be VERY careful with 'Like Kind Exchanges', as non real estate items may only apply to business'.

[/ QUOTE ]

I have been told this never been tested in court with cars being used as a Like Kind.....I wouldn't want to be the test case. Let Uncle Sam have his share. Less ulcers that way.