Many of my clients ask me “Why are we not reporting the loss from the sale of my BMW? I lost so much, I would like my taxable income to be reduced by that loss.” The answer is simple: the loss from the sale of personal property is not deductible. You may only deduct the losses from the sale of personal property that are incurred in a trade or business, or losses incurred in any transaction entered for profit, or losses to personal property arising from any casualty like fire, storm, theft, etc. Normally, when you purchase a personal vehicle, you know that the market value of that vehicle will drop down the moment you exit the dealership. So if you purchased the vehicle for personal use, you may not deduct any loss from the sale of this property. Sorry it is what it is.
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