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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13339
Experience:  15years with H & R Block. Divisional leader, Instructor
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In 2006 I purchased a very rare, very expensive collectable

Customer Question

In 2006 I purchased a very rare, very expensive collectable vehicle with the intent to have restored and sold for profit. I am not a dealer. Purchased in the Midwest. Transported to my resident state of CA. Title not available at that time. Bought on Bill of Sale. Stored in CA and not driven on public t'fare. No CA tax paid. I travelled through country interviewing restoration shops--travel expenses accrued. Storage, insurance, etc. accrued. Sold at auction in unimproved condition 2014 in CA at a loss from original purch price not including additional costs for holding and marketing car and travelling. What can I take as loss. Do not want to initiate other possible inferences from Calif regarding tax liab. Title was recovered from person I initially bought car from and put in my name, Calif. title. Buyer bought at auctiion in Calif. transporting immediately to Louisiana. My loss reporting?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello,

As this was a capital asset you can claim a loss. You cannot add the expense you paid for travel and trying to find a restoration shop unfortunately. This is because you are not in the business if selling or a dealer and you did not have anything restored on the vehicle.

Your loss is the difference in your cost (plus improvements) and the sale price (less cost to sell).

If your loss is more than other capital gains you can apply $3000 of the loss against other income (like wages) then carry forward till used .

If my answer addressed your question please rate below or above (let me know if you have difficulty as I believe the system changed), if you need more information reply below.

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