Income Tax liability when selling Speedster???

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Joseph Gregory Dahlem
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Income Tax liability when selling Speedster???

#1 Post by Joseph Gregory Dahlem »

If you sell a Porsche you have owned and raced for 50 years, is there a tax liability. Need to know, please.

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Tom Coughlin
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Re: Income Tax liability when selling Speedster???

#2 Post by Tom Coughlin »

I am told by my wife (who knows this stuff) that capital gain taxes will be due. If you are going to buy another car look into a 1031 swap (use "search" above and you'll get more info.) Here is one link to some 1031 info.

viewtopic.php?f=6&t=38677&hilit=1031
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Adam Wright
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Re: Income Tax liability when selling Speedster???

#3 Post by Adam Wright »

Joseph Gregory dahlem wrote:If you sell a Porsche you have owned and raced for 50 years, is there a tax liability. Need to know, please.
That's probably why most guys say when I come to buy their Speedster to "bring cash".
This pic was taken before I bought a 55 Speedster.
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Geoff Fleming
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Re: Income Tax liability when selling Speedster???

#4 Post by Geoff Fleming »

Adam,
Oh, c'mon. It is common knowledge you keep piles of cash like this on a daily basis. This may even be one of the smaller stacks!

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Dan Kalinski
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Re: Income Tax liability when selling Speedster???

#5 Post by Dan Kalinski »

Will depend on your tax bracket. Also depends on the short/long term of ownership. Since you have owned it for a long time, it might be a little easier on you. Further, you can deduct all the associated taxes you paid on the car over the years and any "improvements" you made on the car excluding regular maintenance.

See this:

https://www.nerdwallet.com/blog/taxes/c ... tax-rates/

and this:

https://www.dmv.org/articles/income-tax ... -used-car/

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Martin Benade
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Re: Income Tax liability when selling Speedster???

#6 Post by Martin Benade »

Also if you pay someone more than $10,000 aren't you supposed to report it to the IRS somehow?
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Adam Wright
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Re: Income Tax liability when selling Speedster???

#7 Post by Adam Wright »

Martin Benade wrote:Also if you pay someone more than $10,000 aren't you supposed to report it to the IRS somehow?
No, you are under no obligation to report that you paid someone, it is up to them if they choose to report the income, but it's not your job to turn your neighbor into the man.
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Martin Benade
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Re: Income Tax liability when selling Speedster???

#8 Post by Martin Benade »

At least that is better than I thought.
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Adam Wright
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Re: Income Tax liability when selling Speedster???

#9 Post by Adam Wright »

Martin Benade wrote:At least that is better than I thought.
When do you want me to swing by? Tomorrow?
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Ron LaDow
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Re: Income Tax liability when selling Speedster???

#10 Post by Ron LaDow »

Joseph Gregory dahlem wrote:If you sell a Porsche you have owned and raced for 50 years, is there a tax liability. Need to know, please.
BTW, I see it's you're first post, so welcome!
But in answer to your question, it's probably better if you get advice from a tax pro rather than opinions taken from the web.
Ron LaDow
www.precisionmatters.biz

Frank R Allocca
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Re: Income Tax liability when selling Speedster???

#11 Post by Frank R Allocca »

You will need to consider the capital gains tax in you State on top of the federal ( which depends on you personal tax bracket plus Mr Obama's 3.5 % for the ACA) , a 1031 exchange requires an neutral agent who handles the transaction both on the sell and buy side , you have 45 days to find a suitable replacement and then I believe 6 months to complete the transaction! John Draneas Esq, an attorney in Oregon who writes in the Sports Car Market, has been helpful for me in the past. Not a bad problem to have. Might consider waiting until you see if congress will pas a Tax Package, it might include some relief on Cap Gains!

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Wil Mittelbach
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Re: Income Tax liability when selling Speedster???

#12 Post by Wil Mittelbach »

Cars (356s) classified as "collectibles" have a higher capital gains tax than non-collectibles. Differentiating between the two for acceptability by the IRS (and/or state) for tax purposes is a challenge.

Steven Murray
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If U restored that Speedster - how much allocated for TOOLs

#13 Post by Steven Murray »

Hopefully you can write off the Miller Welder, Compressor, Paint gun, plasma cutter and 300 Amp service upgrade into the basis cost of the car. Lift? Garage de-humidification system.

I always wondered if you could sell a collection to add a few $$ loosers into the mix, make the buyer also purchase that 1995 volvo I paid $24,000 for. The 2000 subaru I paid $22000 for. So there's $46K added to the cost of my "collection".

Finally with the 1031 - maybe it doesn't have to be a car?? Swap into real-estate or even stocks?

I'm not looking for a serious answer - these things are just bouncing around in my head. Since we are on the subject.

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Jim Neil
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Re: Income Tax liability when selling Speedster???

#14 Post by Jim Neil »

Hate to break it to you, but in the USA, if you sell personal property at a profit (after cost, improvements, etc.) you must pay capital gains tax on the profit. Doesn't matter if you bought it 50 years ago and inflation has gotten it to today's value, you still pay capital gains tax on the inflated value (of course, a total ripoff).

Internal Revenue Code Section 1031 allows you to trade into a "like kind" asset (most common RE for RE) and defer tax, not sure how this works with collectible cars).
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Charles H Jacobus
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Re: Income Tax liability when selling Speedster???

#15 Post by Charles H Jacobus »

Wouldn't you avoid the tax by leaving it to your kids (assuming your estate was below the multi-million dollar total cut-off)?

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