How should I report profit from selling my car across state lines for my taxes?

12 Thanks for the info! So if I understand correctly, I'd report a profit of $1,900 ($15,700 - $13,800)? Also, what about sales tax I paid when I first bought the car? Can I include that in my cost basis?

7 Yes, your profit would be $1,900 based on the figures you provided. That's the difference between your actual purchase price and the selling price. Regarding sales tax, that's a good question - yes, sales tax paid on the initial purchase can be added to your cost basis. So if you paid sales tax when you bought the car, you can include that amount in your cost basis, which would lower your taxable gain. Keep in mind you'll need documentation of that sales tax payment if you're ever audited.

19 Does it work well with older records? My documentation from when I bought my car is pretty spotty - mostly just have the bill of sale but missing some receipts for work I did on the car.

8 Is this service actually accurate? I'm worried about relying on AI for tax advice when the stakes are getting audited by the IRS.

4 It works surprisingly well with incomplete records. You can upload what you have, and the system helps identify what might be missing and how to document or estimate those values according to IRS guidelines. It even helped me calculate a reasonable estimate for some improvements I made but had lost the receipts for. Regarding accuracy, I was skeptical too initially. What convinced me was that their analysis includes specific IRS references for each recommendation. I actually double-checked some of their advice with the IRS publications they cited, and everything aligned perfectly. They're not just making guesses - they're applying actual tax regulations to your specific situation.

20 How does this even work? I thought everyone just had to suffer through the IRS hold times like some sort of tax season ritual.

8 This sounds too good to be true. The IRS wait times have been ridiculous lately. You're telling me this service somehow jumps the queue?

15 It's actually pretty straightforward - they use an automated system that continually calls the IRS and navigates the phone tree for you, then alerts you when they've reached a human agent. So you're not technically jumping the queue, but you don't have to personally sit on hold. Their system does the waiting for you and calls you when an agent is available. No, they don't jump the queue. They just handle the waiting process for you, so instead of you sitting on hold for hours, their system does it and alerts you when an agent is available. They essentially navigate through all the IRS phone menus and hold times, then call you once they've reached a real person. The video demo shows exactly how it works if you're curious.

16 Wait, really? I thought capital gains only applied to investments like stocks and real estate. Cars are considered capital assets too?

3 Yes, cars are indeed considered capital assets for tax purposes. Any tangible property you own is generally a capital asset unless it's specifically excluded in the tax code. Since you owned the car for personal use (not as inventory in a business), when you sell it for more than you paid, that's a capital gain. And you're right that this distinction matters because long-term capital gains (assets held more than one year) are typically taxed at lower rates than ordinary income. Depending on your income bracket, you might pay 0%, 15%, or 20% on those gains instead of your normal income tax rate.

17 This is a really good point. I used my last car for Uber driving part-time and had to deal with depreciation recapture when I sold it. Totally different tax situation than a personal vehicle sale.

10 Exactly! Business use dramatically changes the tax treatment. When you claim depreciation deductions for business use of a vehicle, you're reducing your basis in the asset. Then when you sell it, you may have to "recapture" those deductions by reporting them as ordinary income, not capital gains. It creates this weird hybrid situation where part of your profit might be taxed as ordinary income (the recaptured depreciation) and part might be taxed as capital gains (any additional profit above the original basis minus depreciation). Definitely worth mentioning since many people have side gigs using their personal vehicles these days.