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Do I have to claim money received from an automobile accident on my taxes?

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Do I have to claim money received from an automobile accident on my taxes?

Postby fayne » Wed Mar 23, 2011 8:22 am

I received a check for my totaled car, and am not sure if I have to claim this money as some form of "other income" on my taxes. It would seem crazy to have to pay taxes on money that I received for my car, which I paid tax on when purchased, especially considering the money will be used for the purchase of another car that will also be taxed.
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Do I have to claim money received from an automobile accident on my taxes?

Postby donahue » Wed Mar 23, 2011 8:26 am

No, this is not income & not taxed as income.

It is for repair or replacement of your vehicle.



If you received more than your auto is worth, that portion would be income & taxable.
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Do I have to claim money received from an automobile accident on my taxes?

Postby bartholome94 » Wed Mar 23, 2011 8:33 am

Insurance payments are untaxed.

One way to avoid inheritance tax is to take out a huge insurance policy on the elderly rich guy (which he pays for out of a portion of his estate). The insurance payment is untaxed, while in inheritance may have been hit by the debutante tax.
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Do I have to claim money received from an automobile accident on my taxes?

Postby wybert85 » Wed Mar 23, 2011 8:36 am

I would say hell no!

Here is the thing: Is it reported to the IRS? Answer = No.

Therefore, don't report it. I can't think of anyone that does this at all and so you run the risk of giving your return extra scrutiny if you do indeed report. Ignore the whole issue.

The only exception may be if this car had something to do with a biz.

Other than that, silence is golden!
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Do I have to claim money received from an automobile accident on my taxes?

Postby mainchin » Wed Mar 23, 2011 8:41 am

No, the claim money your received for totaled car is not taxable.
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Do I have to claim money received from an automobile accident on my taxes?

Postby haldane » Wed Mar 23, 2011 8:45 am

unfortunately yes you are probably going to have to. Point to fact is when you buy a car you pay taxes on that car. If you sell that car you pay taxes on that money, AGAIN. Every time you sell that car you have to pay taxes on it. So yes you need to report that money. How to report that money and exactly on what form I don't know know you may have to look into that a little further. But ALL income is reportable.

Hope this helps.

:-)
Doc
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Do I have to claim money received from an automobile accident on my taxes?

Postby peyton89 » Wed Mar 23, 2011 8:47 am

No, since it was reimbursement for your loss, whether you used it to buy a new car or not.

If any of the money was for lost wages, that part would be taxable.
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Do I have to claim money received from an automobile accident on my taxes?

Postby alrigo » Wed Mar 23, 2011 8:54 am

no
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Do I have to claim money received from an automobile accident on my taxes?

Postby dohosan » Wed Mar 23, 2011 8:59 am

NO unless you received a 1099 form which I highly doubt.
It's not considered income just like if your house burned down and insurance gave you a check to replace it or your medical insurance gave you a check to pay for surgery.
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Do I have to claim money received from an automobile accident on my taxes?

Postby fitz » Wed Mar 23, 2011 9:08 am

NO unless you received a 1099 form which I highly doubt.
It's not considered income just like if your house burned down and insurance gave you a check to replace it or your medical insurance gave you a check to pay for surgery.
If you never claimed any deductions related to the car, then you do not include the money received for the car.

If you deducted the value of the totaled car, or the damage to the totaled car, on Schedule A of a tax return for a previous year, then you must include the money received in your income, as a recovery of previously deducted funds.

If you previously claimed depreciation of the car as a business expense, then you have to calculate your basis (original cost minus depreciation) and see if you have a taxable capital gain.
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