If I sell a car or boat at a profit, I assume I have to pay a capital gains tax.
Does it work in reverse as well? Can I declare a capital loss if lose money on the sale of a car or boat?
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No, you cannot. It looks like if you sell it at a profit you would be subject to capital gains but if you sell it at a loss you are not eligible for capital loss deductions. This is presumably because most cars depreciate and are expected to be sold for a loss. Such loss could be gamed very easily and it would be easy to pay little to no tax.
Source: Tax Planning Guide
Imagine if a business could do this. If they sell at a profit, that means they would have to have either put lots of work into it, make an arbitrage deal, or hold a classic long enough for the value to rise again. These are all legitimate ways of making money.
On the flip side, a car that is purchased (at least for a company) is subject to amortization in which the cost of the vehicle can be deferred against income and serves as a tax shield. Allowing this to be deducted could inadvertently create a situation where a company is benefiting from the amortization tax shield and the capital losses.
Hope this helps!