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Posted on 5/26/2009 9:29:55 PM Claudia |
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Will I Pay tax on Sale of my trailer?
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| does a person have to declair moneys from the sail of a trailer? |
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| Income from sale of trailer that is used as business property is fully taxable and will be considered as ordinary income, if the trailer was used as personal property, only the Gain from that sale is taxable and will be considered capital gain. The gain is calculated by deducting the cost of the trailer plus any expenses that have not been claimed throughout the use of the trailer from the sale price. Any sale expenses (i.e. broker fees, lawyer fees, inspection cost etc...) will be deducted from the sale price as well to reach the gain or loss from the sale price. If the trailer was held for 12 month or more, the capital gain will be taxed as long term capital gain at a maximum rate of 15%. If you held the trailer for less than 12 months, the capital gain will be considered a short term capital gain and will be taxed as ordinary income. IRS Publication 525, offers more information on sale of personal property "if you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry, or silverware, your gain is taxable as a capital gain." |
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