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How to declare car sales in Income Tax 2022?

Do you want to ask your questions about how to declare a car sale in Income Tax? So you are in the right place. In today’s article, I will explain how to make the declaration and much more so you don’t have problems with the Treasury.

The month of May 2022 arrives with the obligation to declare the Income Tax. With the final delivery deadline set for the 31st of the fifth month of the year, it is time to declare goods and values ​​and find out if there will be a refund or money to be paid to the government. And that’s when many doubts arise about the process, especially about vehicles. After all, how to declare a car sale?

Before starting the declaration

At the “pre-declaration” moment, before making it fully effective, gather everything that was spent and received during the entire year. For example, the 2022 statement corresponds to all financial transactions for 2021.

Among the values ​​that must be declared, the payment of the insurance indemnity is also a point that can raise doubts in some people, but, like any financial transaction, it is better to choose to declare it to avoid surprises.

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As there may be variations between the amount paid for the car and the amount received from the insurer for compensation, the issue raises doubts. But, for this type of situation, there are ways to solve and make the report. 

To clarify your doubts on this subject, below you will find the main doubts about how to declare a car sale in the Income Tax 2022. Check it out!

How to declare car sale in Income Tax 2022

Before understanding how to declare a vehicle sale on income tax, know that these Geico cars tend to depreciate over time and are usually sold for a price lower than the amount paid at purchase. 

Therefore, it is considered a no-profit operation, which does not generate taxes. However, it is necessary to inform the Tax Authorities of such activity, declaring it as a transaction.

It is worth mentioning that sales tax may be charged if the vehicle is sold for a value greater than R$35 thousand, which is the ceiling limit for exemption and registration of gain in the process. 

If you have collected the tax in the month following the sale by accessing the GCAP 2021 program, simply import the system data in the “Capital Gains” tab for the registration to be made. To import, click on the “Import GCAP 2021” field.

However, if you sold the car at a profit and did not pay tax the following month under GCAP 2021, you must do so now, paying penalties and interest.

But if you want to know how to declare the sale of a car that is no longer part of your assets, just inform the sale in the “Discrimination, including buyer data” field and leave the option “Situation on 12/31/2021” blank.

How to fill in the declaration step by step 

Have you found out everything about how to declare a car sale? For the avoidance of doubt, see how to fill out the declaration.

  • If you do not complete the GCAP 2021, you must inform in “Exempt and Non-Taxable Income” the sale value of the vehicle. 
  • After that, choose the code “05 – Capital gain on the disposal of assets, rights or assets or rights of the same nature, sold in the same month, with a total disposal value of up to R$ 20,000.00, for shares sold on the market over-the-counter, and R$ 35,000.00, in other cases”.
  • And fill in the value in “Amount informed by the taxpayer”. Confirm with “OK” to complete the procedure.

How to declare financed cars on Income Tax 2022

There are also many doubts about how to declare financed cars. To make this declaration, follow these steps:

  • If you purchased a vehicle in 2021, you must inform the transaction on the “Assets and Rights” form. 
  • Inform only the sum of the financing installments until December 31, 2021. In the “Situation on 12/31/2021” space, enter the total amount paid so far, adding the down payment and installments. If you started financing the vehicle in 2021, leave this field blank.
  • Inform in “Situation as of 12/31/2021” the sum made from the amount of 12/31/2020 to the payments made throughout 2021.

And in consortium cases? 

Now that you know how to declare a sale, see also how to declare consortium expenses. To make this declaration, follow these steps:

  • Go to the “Assets and Rights” tab and select the code “95- Consortium not covered”. In the “Situation on 12/31/2021” field, fill in the amounts that have already been paid off from the installments. In the “Status on 12/31/2020” field, enter the number of amounts paid throughout 2020 and in previous years.
  • However, if you started the consortium in 2021, leave the “Status on 12/31/2021” option blank. This must also be done if you were drawn in 2021, so leave the box referring to the situation in the current year blank and indicate the vehicle with the code “21- Land motor vehicle”.

How to declare insurance compensation in Income Tax

To make this declaration, follow these steps:

  • In this case, select the “Assets and Rights” tab and in the “Discrimination” section indicate what happened to the vehicle and the amount received for compensation, if any. Also, inform the car details and information about the insurance company. Leave the field “Status on 12/31/2021” blank.
  • In addition, if the amount of compensation is greater than the amount paid when purchasing the vehicle, the difference must be declared under “Exempt and Non-Taxable Income”. In line 2, indicate only the difference from the declared value for the car.
  • And if you purchased another car in the same year, you must declare this in “Assets and Rights”, with the code “21 – Land motor vehicle”. Under “Discrimination”, enter the new vehicle’s data and the amount of compensation with the seller’s information. In the “Status on 12/31/2021” field, enter the amount paid for the car.

Main doubts about the declaration 

Below we separate some of the main doubts about car declaration that always appear on the internet. Come on:

  • Taxes and vehicle expenses are tax-deductible no, vehicle expenses such as taxes, supplies, maintenance, and overhauls are not tax-deductible.
  • How to declare a stolen car or a total loss in the IR 2022 – if you are wondering how to fill out the declaration for a stolen or total loss car and in situations where you have been compensated, check out the following.

Finally, we hope we have helped you to understand how to declare a car sale in the 2022 IR. By the way, if you have purchased a new vehicle and have not yet hired one.

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