Quote Originally Posted by firebird77clone View Post

If you run it through the bank, then it's income.
Not quite, as someone who has in the past bought and sold as many as 15 cars to get the correct parts to finish the restoration of one car, I can tell you that the seller, as long as it is not is main source of income, less likely to have to worry about the consequences of taxes (sorry, no long term capital gains taxes apply to cars, only short time (as in under a year). The buyer pays for the car, then the buyer pays his/her state taxes when he/she goes to title (make sure to fill in the buyers name on the back of the title when it leaves your possession) and register it. Again, we are talking about you as the hobbyist selling one of your toys, not you as a professional automotive business selling a car. if you are in that business, then the way taxes are calculated depend on how your business is set up (llc, sole proprietor, S Corp, etc) and how in tune your accountant is with the procedures for each. Finally, some of you live in a state where even though the buyer pays taxes, you are taxed on the sale as well. At that point only your true capital gain will come in to play. Gas, oil, maintenance, entry in to car shows, along with travel expenses will come in to play to lessen the impact of any capital gains. Same goes with costs for the parts, paint, shop supplies, and a host of other misc items that all add up. Again your accountant will be your guide in regards to this, as you can write off quite a bit as a hobbyist......


Bill S.