How to Deal with Taxes on Car Sale Earnings
While some people flip cars as a business, the majority of our Insiders use our principles to buy and enjoy their exotics at no cost, not necessarily to flip for profit.
My #1 recommendation before talking taxes is considering if the car is for business or pleasure.
If for business, it is best to setup an LLC that allows you to write off repairs, interest, and even payments on the cars since they are 100% for business use and are business assets.
If it’s for personal use and you’re buying and selling less than 2-3 cars a year, then it has been my experience that you are fine not even considering having a discussion about your earnings.
Each and every one of our Insider’s share a unique tax situation due to different earnings and tax brackets, so it is best to consult with your independent CPA to understand what benefits or loopholes are available to you based on your business type and earnings.
My own companies allow me to write off 100% of the car’s cost and expenses rather than mileage, allowing me a significant amount of support to offset other earnings. I keep my personal cars like my Aston Martin Vanquish separate from business vehicles that are owned by my automotive based business: VIP Motoring.