Has anybody gotten a definitive answer as to whether or not we have to pay income tax on these cars? My accountant will be happy to research this and render a recommendation for a stiff fee.
It seems to me that these cars were on sale, like a Black Friday TV on sale for half-price. I can see the IRS taking the position that those who flipped these (sold them for profit) should report the profit as taxable income. I was shopping for a new (used) car at the time, so I kept the car as my primary transportation.
Key word is "should". Viewing some of the most recent Hot Deals (i.e. Best Buy coupon thread)... some people favor replacing "should" with "what can I get away with."
No income tax has to be paid on this deal unless you resold the car for more than you paid for it. It is no different than buying any other item for 50% off. The guy I spoke to at AutoNation even commented to me that this was almost as good as winning the car since no income tax had to be paid on it. Also, AutoNation did not issue any sort of 1099 in regards to this deal.
Also, you might want to consider switching CPAs. This is a very simple question and no amount of research should be necessary for anyone familiar with tax laws. Not sure whether he really needs to research it or if he is just trying to squeeze some more fees out of you.
Last edited by string3599; 01-28-2013 at 06:02 AM..