I just sold my truck, is it considered earned income?

It will when the new owner of the truck has the title saying purchase price of $0.00

 

I doubt the new owner who gave you money will be dumb enough to go along with it.

But, in reality, the point is moot. You need to contact a tax advisor and at the bare minimum look at the instructions for form 4797.

 

If you paid $ 56000.00 and sold it $30000.00. capital gain tax??? you lost money how is that taxable?

 

thanks for the reference to 4797. I stand corrected.

I think he may want to reference Form 8949 though

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


Publication 544 covers sales of capitol assets.
http://www.irs.gov/pub/irs-pdf/p544.pdf

 

He paid it off in May. The total paid for it was 56,000.00. How long had he had it in service?

What was the book value after the tax write off for depreciation.

 

I think I would just hand the papers to my CPA who does my taxes......

 

I do not have to worry about that. I prepare my own.

 

The wife works for my CPA. I just hand her the papers when she goes to work.....

 

You need to read the definition of the IRS concerning a capital asset. A truck used in the production of income is an asset used in a trade or business and the sale of the asset is treated as such under form 4797.


http://www.irs.gov/publications/p544/ch02.html#en_US_publink100072479

[h=4]Capital Assets[/h] Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. For exceptions, see Noncapital Assets, later.
The following items are examples of capital assets.

• Stocks and bonds.
  
• A home owned and occupied by you and your family.
  
• Timber grown on your home property or investment property, even if you make casual sales of the timber.
  
• Household furnishings.
  
• A car used for pleasure or commuting.
  
• Coin or stamp collections.
  
• Gems and jewelry.
  
• Gold, silver, and other metals.

Personal-use property. Generally, property held for personal use is a capital asset. Gain from a sale or exchange of that property is a capital gain. Loss from the sale or exchange of that property is not deductible. You can deduct a loss relating to personal-use property only if it results from a casualty or theft.
Investment property. Investment property (such as stocks and bonds) is a capital asset, and a gain or loss from its sale or exchange is a capital gain or loss. This treatment does not apply to property used to produce rental income. See Business assets, later, under Noncapital Assets.
Release of restriction on land. Amounts you receive for the release of a restrictive covenant in a deed to land are treated as proceeds from the sale of a capital asset.
[h=4]Noncapital Assets[/h]


A noncapital asset is property that is not a capital asset. The following kinds of property are not capital assets.

1. Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business. Inventories are discussed in Publication 538, Accounting Periods and Methods. But, see the Tip below.
   
2. Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of any properties described in (1), above.
   
3. Depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later), even if the property is fully depreciated (or amortized). Sales of this type of property are discussed in chapter 3.
   
4. Real property used in your trade or business or as rental property, even if the property is fully depreciated.
   
5. A copyright; a literary, musical, or artistic composition; a letter; a memorandum; or similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs):
   
   1. Created by your personal efforts,
      
   2. Prepared or produced for you (in the case of a letter, memorandum, or similar property), or
      
   3. Received from a person who created the property or for whom the property was prepared under circumstances (for example, by gift) entitling you to the basis of the person who created the property, or for whom it was prepared or produced.
   
   But, see the Tip below.
   
6. U.S. Government publications you got from the government for free or for less than the normal sales price or that you acquired under circumstances entitling you to the basis of someone who got the publications for free or for less than the normal sales price.
   
7. Any commodities derivative financial instrument (discussed later) held by a commodities derivatives dealer unless it meets both of the following requirements.
   
   1. It is established to the satisfaction of the IRS that the instrument has no connection to the activities of the dealer as a dealer.
      
   2. The instrument is clearly identified in the dealer's records as meeting (a) by the end of the day on which it was acquired, originated, or entered into.
   
   
8. Any hedging transaction (defined later) that is clearly identified as a hedging transaction by the end of the day on which it was acquired, originated, or entered into.
   
9. Supplies of a type you regularly use or consume in the ordinary course of your trade or business.

 

been reading them.

I see where you are coming from....

But I also keep seeing it in the area where it's also referencing "sale to person related to seller."


http://www.irs.gov/pub/irs-pdf/p544.pdf
page 24

Yes, I am trying to make heads or tails of this.

Reading
http://www.irs.gov/pub/irs-pdf/i4797.pdf
Also