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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I bought a Pick up truck in 2008 at $ 14,000.00 and sold it

Customer Question

I bought a Pick up truck in 2008 at $ 14,000.00 and sold it in 2011 to a business for 11,000.00. The business issued a 1099 -misc for the $ 11,000.00 and now i am getting a CP2000 from the IRS saying that I owe them $ 2,939.00 more in taxes. What steps need to be taken to correct this error.
Submitted: 3 years ago.
Category: Tax
Expert:  Megan C replied 3 years ago.
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thanks for using JustAnswer.com. You will not owe tax on this transaction, because this was a loss and personal losses are not deductible. You will need to provide the IRS with documentation of this sale, showing that it was at a loss and it was a personal property transaction.

Draft a letter to the address on your notice, and include COPIES of your documentation. Send it with a return receipt so that you have proof that you sent this in. It will take the IRS approximately 60 days to respond.

You won't owe the tax - the problem is that the IRS only knows what the computer tells it, and it reported income that you did not claim on your return.

See tax topic 409, which indicates the following: Losses from the sale of personal-use property, such as your home or car, are not deductible. CLICK HERE

Proof of the loss would be showing that you purchased the property for $14,000 and then sold it for $11,000.

Please let me know if you need anything additional. Thanks for using JustAnswer.com and have a happy and safe 2013.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Expert:  Megan C replied 3 years ago.
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. Also if you ever need anything else in the future please Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer
Expert:  Megan C replied 3 years ago.
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. Also if you ever need anything else in the future please Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer