Assume you buy a car for $5000, then two years later sell it for $7000. Do you pay the capital gains tax on that $2000? Is it legal to intentionally buy autos and resell them for a profit or do you need a special license to do that.
In the US:
I am not sure that it would fall under capital gains tax, but you are supposed to pay tax on it. The gain would qualify as some type of untaxed income and your tax return/bill would be adjusted accordingly.
You are also supposed to pay tax on illegal gambling income!
Obviously I am not an accountant, just a long time doer of my own taxes.
In North Dakota the buyer pays sales tax to the state. The seller doesn’t unless it’s a business, then I think it gets added to the corporate tax total. If you’re just putting a truck in the classifieds, you wouldn’t pay tax. (More than fair since you would have already paid once when you bought it)
I can’t wait to get to Nevada so this can become a moot point for me. 
Apples and oranges. He’s talking about income tax on the profit, not sales tax on the purchase.
IANA Tax Accountant. Legally you are required to pay taxes on any income you receive. If you make a profit on the sale of a car (or anything else), it should be reported as income. However, you are entitled to deduct expenses, such as repairs, maintenance, wear & tear, etc. I’m not sure what form you would use to report this on.
As a practical matter, most people don’t do this because
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very rarely do you make money when buying and selling a car, unless you’re in the car business.
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there is usually not a paper trail that goes to the IRS to alert them that you have sold a car.
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Do we still have to do the “Hi, Opal” thing?