Question

We got in a car total loss accident last year. The insurance company bought the car from us, increasing the payout. Where do I enter the sale info?

Forum|Forum|1 year ago
February 19, 2025
1 reply
0 views

They paid us money for tax on the purchase. I think I need to report the sale and pay the tax. Where do I go to enter that?

M

MindyB

If the vehicle was only used for personal use (not a business), the insurance payout was less than the cost, and you did not receive a 1099, you do not need to report anything on your tax return. Often, insurance payouts include an amount for sales tax to cover "replacement cost", which would be less than what you paid after time has passed, mileage has increased, etc.

Generally, insurance payouts on total cars result in a loss, and personal losses are not deductible. Thus, you have no reporting requirement.