I get a car! And I get a car!
February 26, 2010 8:41 AM Subscribe
I'm purchasing a new car, and I'm getting conflicting information about what to do with an insurance settlement check I received.
posted by anonymous to work & money (3 answers total)
My insurance company recently decided to settle a claim with me, and I received a check for the actual cash value of my car (over $14K) minus the remainder of the loan (under $3K) minus my $250 deductible. So I have a check for more than $11K, and I'd like to put all of it toward the down payment on my new car.
I'm hearing that if I take the check and deposit it, that counts as income I'll have to report to the IRS.
I'm ALSO hearing that it's not taxable income, based on the idea that I effectively sold the car to my insurance company for less than I paid for it originally, so I didn't make any money off of the deal.
Can any CPAs out there (yes, yes, who aren't my CPA) straighten me out on this? I'm in Virginia, if that makes a difference.