Sale of tractor taxes

Dwats

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Sorry if this has been covered, if it has I couldn't find it.

So if I sale my non farm use tractor what, if any, taxes am I liable for? Do I report it as income? Thanks
 

85Hokie

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Sorry if this has been covered, if it has I couldn't find it.

So if I sale my non farm use tractor what, if any, taxes am I liable for? Do I report it as income? Thanks

Unless you are in a state that I am not aware of ........... no on taxes and I would not report any income. WHY? because you already paid a tax on it if new.... and if bought it used - you did not pay taxes then either, unless from a dealer. Only thing you might ought to have is a detailed bill of sale.
 
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RCW

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Yep - I agree with Hokie. I’m no expert, but private sales of personal property don’t require any reporting I’m aware of.

That said, understand some states do treat personal property differently than others.
 
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bucktail

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If you've been using it for a non farm business and have been deducting depreciation the proceeds on the percent depreciated are capital gain. Otherwise no. That's how I remember it from 30 years ago anyway.
 

lugbolt

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private sale, don't worry about it

buying from a retailer who has a tax ID, yes you're probably gonna have to pay tax on it unless your state has laws on the books that specify otherwise

here, you pay tax on any vehicle sold that is over $4000. It it ridiculous. Tax was paid when purchased new. Then it's sold, tax paid again. Every single time it's sold it is supposed to be taxed. It is not just sales tax. It is called sales and use tax. if you are gonna use it you pay tax on it which is in my opinion double taxation since you pay tax on personal property, tax on gas/diesel, tax on basically every aspect....just gets my blood boiling. A few years ago they exempted farmers who file the farm tax exemption but they are cracking down on that too since many owners of 40 acres or more are considering them farms so they can avoid taxes, then they're using their "farm equipment" for recreational use. Side-by-sides have been targeted as of lately and I hear they are basically going door-to-door. I ain't got no farm so I can't speak with firsthand experience in that sense. I just see what's going on with the owners of vehicles that I service/repair at the shop.
 
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85Hokie

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private sale, don't worry about it

which is in my opinion double taxation since you pay tax on personal property, tax on gas/diesel, tax on basically every aspect....just gets my blood boiling.

Can I get an Amen !!!! Lugbolt - well said!
 
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bearbait

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I usually follow one simple rule in life, what they don't know won't hurt you. ;)
 
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Dwats

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Thanks everyone. I've tried to keep this cash only but the best offer I'm getting is from a guy who owns an excavating business and he wants to pay with a certified check. Just want to make sure it doesn't come back to burn me tax-wise.
 
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ccoon520

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If you are selling it to someone to use as part of their business then I am fairly certain it is a tax exempt sale anyway.
 

Magicman

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Since this sale is to a business paying with a certified check, it's obvious that he is going to claim this purchase as a business expence. In this instance I would call my CPA.
 

DustyRusty

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If you sell it at less than what you paid for it, then there is nothing to report, however, you can't take the loss on the difference between what you paid and what you received. Just like you don't have to report yard sale income, because the government knows that what you paid for it will be more than you sold it for. The exception to the rule, is if the item appreciated in value, and you have a profit. Then it will usually be a long term gain, at the lower rate. Unless you are in a high tax bracket, the government usually doesn't scrutinize everything you do in your life. Now, if your name is Donald, or Hunter, they will put your life under a microscope!
 
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lugbolt

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I'm not giving my name, but they scrutinize everything I do too....at an average working person's pay (about $50k/yr).

For many years I always took the standard deduction because it was easier. Generally speaking when I work(ed) on my taxes, I'd have just a little over the standard anyway. After 28 Jan 2011, that practice ended. And because of that, I take every.single exemption, deduction, write-off, etc that I can legally take, and I mean all of them (that I know of--and I try my best to stay up to date on it). They want to play, I'll play...legally and they know it. Taxes are in the back of my mind in about everything I do.

it is ridiculous and it "should" be illegal. But the IRS agent once told me and I directly quote "we are the irs we can do anything we want"

they want you to pay 50% or more taxes on what you own, and they do it legally by playing the wording (just as politicians always do)

On motor vehicles you pay tax on gas/diesel, personal property, sales and use tax, tax on repair and maintenance parts, tire tax (on top of sales and use tax that you also pay on the tires), much much more...it all adds up.

on farm tax exemptions, you have to be careful. I think I mentioned before that they were actively going after people who were using their "farms" for their own tax incentives here. My friend had the agents show up looking for a certain side-by-side as part of an audit. When asked why he was looking for it, it was explained that the tax code requires that if it is claimed on the farm, it must remain on the farm property only and be used for farm purposes...meaning if they found any deer hunting tools or evidence of it going off the property for anything but repair, etc (recreational use), they could be fined. My friend told them to come back with a warrant which they did. I asked him about sale of farm use property and he said that as long as the bill of sale stated that it was sold to the farm's name and not to an individual, it should be fine. Keep a copy of the signed bill of sale and you're good to go. On the financials, cert check should be ok so long as the farm's name is on it and the bill of sale reflects that. Always write up a bill of sale, and if you don't know how, generally your state should have a downloadable template for you to use, on one of their many websites. Unfortunately you have to protect yourself as much as you can regardless of whether you are the buyer or seller. Even best friends, sometimes things happen (happened to me with an old truck). I sold my old chevy to him and listed the sale price on the BOS for a little less than the taxable threshold, but actually sold it for about $1200 more. Cash sale. Well a few days later he had a problem with the truck (transmission, GMC, imagine that!) and took me to small claims over it, and I nearly got my tit in the wringer over the BOS and sale amounts. I easily won the case but with a stern warning from the judge. In my case, unless the sale contract and/or BOS states otherwise, all vehicles are sold in as-is condition at the time of sale so I was cleared of that part, but they sure weren't happy about the listed sale price vs actual cash sale.
 

GreensvilleJay

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re:

here, you pay tax on any vehicle sold that is over $4000.

Here in Ontario, ALL used cars and trucks get taxed at 13% AND you PAY the greater of THEIR 'bluebook' or the actual sale price ! Say you buy a non running pickup(for the xfr case), $100 sale, 'bluebook' says $3500.
You pay 13% on the $3500 even though you only PAID $100 for the wreck....... Nice, eh !!!
 

NHSleddog

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Thanks everyone. I've tried to keep this cash only but the best offer I'm getting is from a guy who owns an excavating business and he wants to pay with a certified check. Just want to make sure it doesn't come back to burn me tax-wise.
Keep in mind that MOST certified checks can still be stopped.

Only a Bank Issued Certified check can't be sent back. If they will take the time to get an actual certified check, they can just get cash instead.

Personally I would never take a check. Been buying and selling for years and years.

My QA goes like this,

Me. So 10k we have a deal.
Buyer, great, will you take a check, it is from a local bank

Me. your local bank?
Buyer, yes.

Me. You go there often?
Buyer, yes.

Me. GREAT, next time you are there, get 10K in cash and head right over. I never go to your bank.

And the whole "I have a company" doesn't wash. At our company we cash company checks for cash at the bank all the time. If you want over 50k most banks will need a couple days notice, but it is still no big deal for a company to get cash.
 

Jchonline

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Keep in mind that MOST certified checks can still be stopped.

Only a Bank Issued Certified check can't be sent back. If they will take the time to get an actual certified check, they can just get cash instead.

Personally I would never take a check. Been buying and selling for years and years.

My QA goes like this,

Me. So 10k we have a deal.
Buyer, great, will you take a check, it is from a local bank

Me. your local bank?
Buyer, yes.

Me. You go there often?
Buyer, yes.

Me. GREAT, next time you are there, get 10K in cash and head right over. I never go to your bank.

And the whole "I have a company" doesn't wash. At our company we cash company checks for cash at the bank all the time. If you want over 50k most banks will need a couple days notice, but it is still no big deal for a company to get cash.
I agree. Cash only. He/she can easily account for a cash withdraw with accounting software and code it properly. If they dont use any, all the more reason to get cash!
 

Ikc1990

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Kubota m125x, m9000, b2710, and other equiptment
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292
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private sale, don't worry about it

buying from a retailer who has a tax ID, yes you're probably gonna have to pay tax on it unless your state has laws on the books that specify otherwise

here, you pay tax on any vehicle sold that is over $4000. It it ridiculous. Tax was paid when purchased new. Then it's sold, tax paid again. Every single time it's sold it is supposed to be taxed. It is not just sales tax. It is called sales and use tax. if you are gonna use it you pay tax on it which is in my opinion double taxation since you pay tax on personal property, tax on gas/diesel, tax on basically every aspect....just gets my blood boiling. A few years ago they exempted farmers who file the farm tax exemption but they are cracking down on that too since many owners of 40 acres or more are considering them farms so they can avoid taxes, then they're using their "farm equipment" for recreational use. Side-by-sides have been targeted as of lately and I hear they are basically going door-to-door. I ain't got no farm so I can't speak with firsthand experience in that sense. I just see what's going on with the owners of vehicles that I service/repair at the shop.
You live In the $3999.99 state lmao
 

ACDII

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B2410, L352 Loader, Woods BH70-X backhoe
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The buyer is the one to pay taxes, not the seller. The only time selling requires tax payments if if it is sold through a business as a manufactured good, or third party retail.

If you were to make plaques and sell them as a side business, then you are obligated to paying taxes on good you produced and sold, but, if you charge tax on the sold goods, then that tax is forwarded to the IRS as sales tax, then at year end or quarterly you must pay taxes on your sales as income after deducting expenses.

If you purchase a car, truck RV plane train or tractor, and it is not farm use exempt, then you paid sales tax on it at time of purchase. This is an asset to you. If you turn around and sell it for less than you paid, then it is a loss, you would not be required to pay any tax because you already paid the tax. If you flipped it and earned money on it, then you could be liable for the tax on the earned income amount. Chances of getting caught on that are slim to none.

I don't know how sales of farm exempt equipment is, but more than likely, who's going to know.

Where the Gubment DOES get you twice on taxes is when transferring the vehicle to a family member. If I sign the car over to my wife, she has to pay taxes on it based on the book value. Same if you give a car to your kid and sign it over to them. However, IF you put your wife's name in addition to your name, then no taxes are due, that way when you drop dead, her name is already on it and no taxes will be required to be paid when your name is removed. That holds true only for the spouse, not the kids though.

Unless the tractor has to be licensed, No one will know, so sell away and enjoy the cash.
 

fried1765

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Nov 14, 2019
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re:

here, you pay tax on any vehicle sold that is over $4000.

Here in Ontario, ALL used cars and trucks get taxed at 13% AND you PAY the greater of THEIR 'bluebook' or the actual sale price ! Say you buy a non running pickup(for the xfr case), $100 sale, 'bluebook' says $3500.
You pay 13% on the $3500 even though you only PAID $100 for the wreck....... Nice, eh !!!
Perfectly normal!
It is the SDC (Socialist Dominion of Canada)!