Do I Owe Taxes on a California Lemon Law Settlement or Buyback?
Reviewed by Nick Movagar, Founder & Attorney, American Lemon Law Group · Last updated August 2026 Key Takeaways The refund of your purchase price is generally not taxable. The IRS treats it as a return of capital, not income. Anything you receive above what you paid for the vehicle is generally taxable, and the…