Insurance Payout For Totaled Car Taxable. You can now use that percentage to determine gain or loss on both a business and personal basis. If there's a gain (which i seriously doubt) then it's taxable business income.
You'd receive a form 1099 from the insurance company each year. What you used the proceeds for after the sale has no bearing on anything. It is fairly typical that your insurance company will want to pay as low as amount as possible based on the following factors;