Tax Reporting for Car Sale Profit When Bought and Sold in Different States?

17 Thanks for the info! Just to clarify - even though I technically "lied" on the DMV registration form about the purchase price (to save on registration fees), I can still use what I actually paid as my basis? Won't the IRS see the DMV records and question that?

8 The IRS and state DMVs don't typically cross-reference those records for personal vehicle sales. Your tax return should reflect the actual economic reality of the transaction - what you genuinely paid for the car. Keep your original purchase documentation (receipt, bank transfer, etc.) to substantiate your claimed basis of $14,100 if ever questioned. For the second part of your question, it's true that the different states don't complicate your federal reporting, but you should check Arizona's tax rules about reporting gains from personal property sales. Some states have different rules about taxing these types of transactions, though most follow the federal approach.

5 Does it actually help with figuring out if registration costs can be included in the basis? My situation is similar but I spent about $2k on registration over the years for my car that just sold.

19 How does it handle improvements to the vehicle? I put in a new transmission ($3200) before selling my car and I'm not sure if that adds to my basis or not.

12 Yes, it specifically breaks down which registration costs can and cannot be included in your basis. Generally, the initial registration when purchasing might be added to basis, but annual renewal fees typically cannot. The tool makes this distinction clear. For vehicle improvements, it absolutely handles those! Major repairs like a new transmission ($3200) are typically considered improvements that add to your basis rather than regular maintenance. The tool has a specific section where you can input these capital improvements and it factors them into your final basis calculation.

22 Wait, how does this actually work? Does Claimyr just call and wait on hold for you? Seems too good to be true.

19 I'm skeptical this works. The IRS phone system is notoriously horrible. I've been disconnected multiple times after waiting 1+ hours. If this actually works I'll eat my hat.

3 It works by using their system to navigate the IRS phone tree and wait on hold for you. When an agent actually picks up, you get a call connecting you directly to that agent. No more listening to that horrible hold music for hours! Yes, it absolutely works. I was skeptical too, but I was desperate after multiple failed attempts and disconnections. Their system is built specifically to handle the IRS call routing system. It stayed connected when my phone calls kept dropping, and I finally got my questions answered about my car sale reporting. Just try the demo link I shared - you'll see exactly how it works.

14 What if I didn't officially claim the car for business use but I did use it sometimes for side gig deliveries? Do I still need to worry about this depreciation thing?

7 If you never claimed the car as a business expense on your tax returns, then you don't have to worry about depreciation recapture. The concern only applies if you took actual tax deductions for business use of the vehicle in prior years. However, if you did use it for your side gig but never claimed the deductions you were entitled to, that's a different issue - you missed out on potential tax savings in previous years, but it won't affect how you report the sale now. You'd simply use your original purchase price as your basis (minus any depreciation you actually claimed on tax returns, which in your case sounds like zero).

11 Technically, all capital gains should be reported regardless of size. But in reality, the IRS has bigger fish to fry than a $250 gain on a personal vehicle. Most people don't even report personal vehicle sales unless they're significant gains.