Once you've successfully sold, traded, scrapped, or donated your vehicle, you're not done yet! As with most business transactions, the IRS wants to get a report and a piece of the profits if you made any.
- If you are selling a vehicle that was used at least partly in business, the general rules on the gain or loss on the sale of a vehicle will apply to your situation. You should also familiarize yourself with the IRS's recapture rules.
- If the vehicle you are planning to sell or trade was used only for personal use, remember that as a rule any gains on the sale of a personal vehicle are taxable, while losses on such sales are generally not deductible. You may still want to become familiar with the information on the gain or loss on the sale of a part-business vehicles if you are unsure of whether you "gained" or "lost" on a vehicle sale for IRS purposes.
- If you are trading in your vehicle for a different vehicle, the trade-in will have an effect on your gain or loss.