Questions regarding selling a Mach-e (Options plan)

[Southern92]

I have not decided to sell my Mach-e, but since I am considering it I thought I would ask the forum members some questions as I believe some of y'all have gone through this process. Some specifics:
MME GTPE
Sale Price: $70,530.00
Sales Tax: $ 6,178.81
Other Fees: $ 879.00
Sub Total: $77,587.81
Ford Rebate: $ 3,500
Total: $74,087.81

Ford Options Plan (3 Year)
Monthly Payment: $1,227.00
Payments made: 2
Location: SoCal

My understanding is that as long as I sell the car for less than I have invested in it, I generate NO capital Gains tax & wouldn't have to report it on my taxes.

1. Is the above statement correct?
2. Is the money I've invested in the MME considered the sales price? Total payments + deposit?
3. Any federal tax credit does not play any part in the above?
4. Is there any additional sales tax due to using the Ford Options plan?

(Un-needed explanation) A change in the families financial situation has made a formerly "manageable monthly payment" into a "manageable monthly payment??". And since I'm the type of person who likes to have spread sheets & contingency plans....I'm doing the same for this situation.

Also I understand I need to speak to a CPA/Tax advisor for my specific situation, and strangers on the internet do NOT constitute that! However I believe there is a wealth of information here & I would appreciate anyone's input. Thanks.

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[RickMachE]

All that matters is what you paid for car. Payments are irrelevant, interest is only part that could count. Any rebates you didn't get at time of delivery are irrelevant. Fed tax credit is irrelevant. Title, registration, etc. all irrelevant.

In your situation, if you have a gain, it will be a short term gain.

Take out of the $879 above title and registration fees. Leave in any dealer processing fees. Ignore 2 payments. You can add in interest only.

That's your cost. If your put ads up on sites, those costs increase cost basis.

 

[Motomax]

Realistically none of it matters. Sell your car, if you happen to make a little profit who cares haha. Maybe you spent a couple grand in upgrades lol.

Legally speaking, whatever the total cost of the car is minus Probably a few fees but again who cares haha

 

[Southern92]

All that matters is what you paid for car. Payments are irrelevant, interest is only part that could count. Any rebates you didn't get at time of delivery are irrelevant. Fed tax credit is irrelevant. Title, registration, etc. all irrelevant.

In your situation, if you have a gain, it will be a short term gain.

Take out of the $879 above title and registration fees. Leave in any dealer processing fees. Ignore 2 payments. You can add in interest only.

That's your cost. If your put ads up on sites, those costs increase cost basis.

As I've been doing research I've come across this from an IRS page:
"In most situations, the basis of an asset is its cost to you. The cost is the amount you pay for it in cash, debt obligations, and other property or services. Cost includes sales tax and other expenses connected with the purchase." (https://www.irs.gov/taxtopics/tc703)

. . .why am I fearing this could get complicated. . .

 

[RickMachE]

I made it simple. You cannot deduct principal payments if you think about it for a minute...

 

[Southern92]

I made it simple. You cannot deduct principal payments if you think about it for a minute...

I get that the principal payment is not deductible. I was looking at "sales tax and other expenses" being part of the cost basis

 

[RickMachE]

Sales tax yes.
Title and registration are not a cost of purchase.
Nor is auto insurance.

Just like paying annual property taxes on a house doesn't count as part of the cost to buy the house.

 

[Southern92]

Ty

 

[kennethjk]

Cost basis of your car is total purchase price plus sales tax

Annual operating expenses do not come into play

federal tax rebate probably reduces your tax cost basis. The same might be true of the option plan rebate.

ads to sell don’t technically increase your cost basis but they reduce you selling price so it has the same impact.

there is not any additional sales tax due to option plan. You paid that all up front.

you cannot take a loss on the sale of personal property but must report the gain on the sale of personal property.

interest paid is not added to cost basis. So interest and principal payments are ignored.

best to speak to appropriate tax consultant.

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