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Selling your wing car???

Started by DoubleDlover, March 02, 2013, 04:03:04 PM

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DoubleDlover

i was curious. Im sure when a wing car owner sells his car. The very last thing they think they should do is give uncle sam Half of it in taxes. So what are the best ways to sell one of these cars and be able to keep the money that is rightfully yours??

hawkeye

according to my cpa, if you are conducting your car activities as a hobby, meaning you didn't deduct the purchase price or expenses of fixing up or maintaining the car,  then procedes from the sale of the car are NOT taxable.

Mopar Nut

Even as a hobby, here in my state if you sell over the limit of cars a year you can be taxed.
"Dear God, my prayer for 2024 is a fat bank account and a thin body. Please don't mix these up like you did the last ten years."

A383Wing

yea...same up here...I ferget what the "limit" is here in Washington State...not that I plan on getting close to it

Bryan

pettybird

you mean privately traded wing cars are worth more than $500?   :poke:

hawkeye

Quote from: A383Wing on March 02, 2013, 04:56:51 PM
yea...same up here...I ferget what the "limit" is here in Washington State...not that I plan on getting close to it

Bryan
  by limit , do you mean number of cars or a certain dollar amount?

A383Wing


odcics2

Capital gains tax - as far as Federal taxes are concerned.   :Twocents:
State taxes depend on the state...  as mentioned above.
I've never owned anything but a MoPar. Can you say that?

hawkeye

it is beyond the scope of this site to try and sort out all the details of the federal tax code.  but before i gave the thieves (federal government) a nickel, i would get advice from an expert.

WINGIN IT

I asked my tax guy this a few years back when I sold a high dollar car at a loss.
I said can I deduct it as a loss. He replied  nope , it's a hobby , so no can do.
So I'll be damned if I sell a car at a profit I'm going to claim it as a capital gain... :Twocents:

hawkeye

the government tried to close a tax loophole because so many people were writing off their hobbies as a business expense.  but when they said you couldn't write off expenses it also means they can't tax the profits.  they weren't expecting people to make money on their hobbies.

taxspeaker

OK Guys here is the correct guidance. I am a CPA and an Enrolled Agent with 30 years experience and the President of the country's largest privately owned training company for CPA's-we train the tax guys. I am also a member of this forum and occasional poster.

Unless you are "in the business" of buying/selling/restoring cars, and very few of us are, then any losses on sales are not deductible. Soooo, keep track of all of your receipts from the day you buy it-I have- and don't ever add them up until you sell it cause you do not want to know what you have in it!

If you sell the car at a profit meaning the sales price is more than (cost + improvement cost), then you are supposed to pay tax at 28%-the car is a collectible, not a capital gain. Even if you receive all cash that is the rule. If you would choose to receive all cash I would suggest that you might want to carefully consider what to deposit in a bank-upon an IRS audit they will assume that any cash deposited to a bank is income. Read between the lines here.

I have gone so far as to use the examples of my car sales in our seminars as people really identify with them. And no, I am not some pointy headed car-ignorant CPA-I put myself through college 40 years ago working in the service department of a couple of Chrysler-Plymouth dealerships and still do all of my own mechanic work.

By the way, to be "in the business" you have to prove that you operate it regularly (buying & selling) and have a profit motive among other rules. Personally I do not write off anything related to the Superbird or Charger or Challenger, but I have every receipt. And no, I have never added them up either!

There you go-free tax advice from an expert-doesn't happen often, particularly in March.

DoubleDlover

hi there. Well thank you everyone for all the posts. And the last guy that was very cool as well. So how about this angle.. say you "sell" your car for 20K And the guy doesnt want to had you cash.. But will give you say.. 4 bank checks for 5 k each. If you cash then at say 1 every 4 days. would that work to stay undetected? cause i know if you slamm more then 10k i think it gets flaged.

taxspeaker

I would give it 11 business days between cashing

nascarxx29

  :Twocents: Keep titles open when selling fliiping . .And have $ wired to your account.
1969 R4 Daytona XX29L9B410772
1970 EV2 Superbird RM23UOA174597
1970 FY1 Superbird RM23UOA166242
1970 EV2 Superbird RM23VOA179697
1968 426 Road Runner RM21J8A134509
1970 Coronet RT WS23UOA224126
1970 Daytona Clone XP29GOG178701

DoubleDlover

well what a minute.. Money wired to your account. I never even thought about that option!. Isnt that kinda the same as a deposit? Or is it somehow looked at or recorded as something different? And what does keep titles open mean ? thanks

JB400

Keeping an open title means not putting a date on it.

nascarxx29

 :Twocents: If I buy a car I leave it in the name I bought it from.And just have seller just sign.Unless its changed had a friend said money wired to your account  Looks better than a guy whos self employed flipping cars .And walking in depositing a bank roll
1969 R4 Daytona XX29L9B410772
1970 EV2 Superbird RM23UOA174597
1970 FY1 Superbird RM23UOA166242
1970 EV2 Superbird RM23VOA179697
1968 426 Road Runner RM21J8A134509
1970 Coronet RT WS23UOA224126
1970 Daytona Clone XP29GOG178701

Mopar Nut

I heard the same thing about using PayPal, it's reported to the IRS when big money amounts is exchanged.
"Dear God, my prayer for 2024 is a fat bank account and a thin body. Please don't mix these up like you did the last ten years."

DoubleDlover

with paypal.. If you either have 20k total sent to you through out the year. or do 200 transactions. Then you have to report it and pay taxes. dont worry. They keep a record and alert the irs. So sell 19k a year. and or 180 trans actions and your cool. For now..

DoubleDlover

ok so buying we have covered. Now selling. if i sell my bird for 75k. what would be a good idea to make sure the gov gets what they deserve for all the hard work THEy put in it as well as me?? which should be 5 bucks..

Mopar Nut

If you bought fuel for your ex bird, you paid your taxes already.
"Dear God, my prayer for 2024 is a fat bank account and a thin body. Please don't mix these up like you did the last ten years."

nascarxx29

Quote from: taxspeaker on March 02, 2013, 10:23:40 PM
I would give it 11 business days between cashing
My friend who sold off cars and moved used the wire transaction . :Twocents:The person who wires in to your account to also can take it back or stop it even after the sale .He had 2 accounts 1 for just cars and regular account.And switched the wire transfer to personal account.As for the state if titles dated and time has elasped its $15 30 late charge to register.And the state local DMV used to be not concerened/ alarmed by a title saying 70 belvedere /road runner.As compared to Corvette or more recognized car.But nowadays Im sure thats changed to
1969 R4 Daytona XX29L9B410772
1970 EV2 Superbird RM23UOA174597
1970 FY1 Superbird RM23UOA166242
1970 EV2 Superbird RM23VOA179697
1968 426 Road Runner RM21J8A134509
1970 Coronet RT WS23UOA224126
1970 Daytona Clone XP29GOG178701

Mytur Binsdirti

Quote from: taxspeaker on March 02, 2013, 09:21:40 PM
OK Guys here is the correct guidance. I am a CPA and an Enrolled Agent with 30 years experience and the President of the country's largest privately owned training company for CPA's-we train the tax guys. I am also a member of this forum and occasional poster.

Unless you are "in the business" of buying/selling/restoring cars, and very few of us are, then any losses on sales are not deductible. Soooo, keep track of all of your receipts from the day you buy it-I have- and don't ever add them up until you sell it cause you do not want to know what you have in it!

If you sell the car at a profit meaning the sales price is more than (cost + improvement cost), then you are supposed to pay tax at 28%-the car is a collectible, not a capital gain. Even if you receive all cash that is the rule. If you would choose to receive all cash I would suggest that you might want to carefully consider what to deposit in a bank-upon an IRS audit they will assume that any cash deposited to a bank is income. Read between the lines here.

I have gone so far as to use the examples of my car sales in our seminars as people really identify with them. And no, I am not some pointy headed car-ignorant CPA-I put myself through college 40 years ago working in the service department of a couple of Chrysler-Plymouth dealerships and still do all of my own mechanic work.

By the way, to be "in the business" you have to prove that you operate it regularly (buying & selling) and have a profit motive among other rules. Personally I do not write off anything related to the Superbird or Charger or Challenger, but I have every receipt. And no, I have never added them up either!

There you go-free tax advice from an expert-doesn't happen often, particularly in March.


There's always someone who's got to be a buzzkill.   ;)

Rat Exterminator

Buzzkill no, very good info yes. Thanks to taxspeaker for the excellent and clear explanations.