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    basspaul's Avatar
    basspaul Posts: 24, Reputation: 1
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    #1

    Mar 25, 2010, 05:18 PM
    Auto buyback considered income?
    Hello,
    I have a Toyota Tundra at a local dealership for a safety recall for frame rust and rot. My question is: if Toyota buys the vehicle back rather than repair it, is this considered income when I file my 2010 taxes? If so, how will affect my adjusted gross income? I live in Rhode Island. Thank you for your time.
    Jaykid007's Avatar
    Jaykid007 Posts: 74, Reputation: 1
    Junior Member
    		  
    #2

    Mar 25, 2010, 06:57 PM

    I don't see any reason why you would have to pay tax on it since its more of a reimbursement for something you already paid for and most used after tax money or a loan to buy it. That my opinion.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Mar 25, 2010, 11:04 PM

    No, it is not income. You are selling your personal property.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #4

    Mar 26, 2010, 07:42 AM

    It would only be income if the amount they pay you is greater than your original cost of the vehicle (including taxes and fees) - which seems highly unlikely. But in that case you'd have a capital gain to report on schedule D.
    basspaul's Avatar
    basspaul Posts: 24, Reputation: 1
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    #5

    Mar 28, 2010, 09:51 AM
    Thank you for your replies. This is very helpful.
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