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Tax.appeal.168
Tax.appeal.168, Tax Accountant
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I won a bass boat got a 1099 for $23000.00 but had to sale

Customer Question

I won a bass boat got a 1099 for $23000.00 but had to sale the for $14500.00 . How do I file this on me fed taxes?
Submitted: 10 months ago.
Category: Tax
Expert:  Tax.appeal.168 replied 10 months ago.

As this is a capital asset, you have to report the sale on the Schedule D and the Form 8949. A few questions. How long did you own the boat? Did you use the boat at all? If so, was it used for personal or commercial purposes? If for personal use, the loss amount is not deductible. However, if the boat was used for commercial purposes, you will be able to deduct $3,000 of the loss amount in the first year, and the remaining loss amount carries forward to future years until exhausted. If you owned the boat for a year or less, you will report the item as a short term asset. If owned longer than a year, then you report asset as a long term asset. For more detailed information regarding capital gains and losses, you can refer to the following IRS webpage:

https://www.irs.gov/taxtopics/tc409.html

Let me know if I can be of further assistance to you regarding this matter.

Customer: replied 10 months ago.
I own the boat 45 days. I did not use the boat @ all.
Expert:  Tax.appeal.168 replied 10 months ago.

Report the sale of the boat as a short term asset. As the boat was not used for commercial purposes, the loss amount on the sale is not deductible, but again, the sale has to be reported on the Schedule D and the Form 8949.

Link to Schedule D/instructions:

https://www.irs.gov/pub/irs-pdf/f1040sd.pdf

https://www.irs.gov/pub/irs-pdf/i1040sd.pdf

Link to Form 8949/instructions:

https://www.irs.gov/pub/irs-pdf/f8949.pdf

https://www.irs.gov/pub/irs-pdf/i8949.pdf

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