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Discuss gift or selling price / transfer of title in the alt.autos.gm forum at Car Dealer Forums; Is it true that when a private party sells a used car that they will ...
  1. #1
    Brian
    Guest

    Default gift or selling price / transfer of title

    Is it true that when a private party sells a used car that they will
    claim it as a gift (in California) so that both parties can avoid
    paying a tax? Its been suggested to me that "everyone" does it this way
    and that my buyer will expect to do it like this when I sell my car. I
    would rather pay the tax and not worry about being penalized for
    breaking a tax law. Am I being wierd or is there a good reason to claim
    my car as a gift?

    Brian


  2. #2
    Steve W.
    Guest

    Default Re: gift or selling price / transfer of title

    Brian wrote:
    > Is it true that when a private party sells a used car that they will
    > claim it as a gift (in California) so that both parties can avoid
    > paying a tax? Its been suggested to me that "everyone" does it this way
    > and that my buyer will expect to do it like this when I sell my car. I
    > would rather pay the tax and not worry about being penalized for
    > breaking a tax law. Am I being wierd or is there a good reason to claim
    > my car as a gift?
    >
    > Brian
    >


    Might be true that folks do it. However it is breaking the law if ANY
    money or goods change hands in relation to the auto. It IS considered
    tax evasion.

    If your "buyer" expects this I would wait for a different buyer.
    Consider that the buyer ISN'T the one who signs the title for transfer
    OR states in writing that the vehicle was a gift. That is what YOU do.

    In most states the DMV will look at the year of the car and base the
    taxable amount on it if the vehicle is worth more than the stated
    purchase amount.

    I would make out the paperwork and put a reasonable amount on it. Maybe
    not the full amount but not a gift.

    http://www.dmv.ca.gov/ Oh and if the vehicle is NOT currently a
    California there are even more rules.


    --
    Steve W.
    Near Cooperstown, New York

    Life is not like a box of chocolates
    it's more like a jar of jalapenos-
    what you do today could burn your ass tomorrow!

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  3. #3
    Mike Hunter
    Guest

    Default Re: gift or selling price / transfer of title

    Call an accountant or you local taxing agency WBMA.


    mike


    "Brian" <btierny@gmail.com> wrote in message
    news:1156457821.416494.95790@i42g2000cwa.googlegro ups.com...
    > Is it true that when a private party sells a used car that they will
    > claim it as a gift (in California) so that both parties can avoid
    > paying a tax? Its been suggested to me that "everyone" does it this way
    > and that my buyer will expect to do it like this when I sell my car. I
    > would rather pay the tax and not worry about being penalized for
    > breaking a tax law. Am I being wierd or is there a good reason to claim
    > my car as a gift?
    >
    > Brian
    >




  4. #4
    The Ghost of General Lee
    Guest

    Default Re: gift or selling price / transfer of title

    On 24 Aug 2006 15:17:01 -0700, "Brian" <btierny@gmail.com> wrote:

    >Is it true that when a private party sells a used car that they will
    >claim it as a gift (in California) so that both parties can avoid
    >paying a tax? Its been suggested to me that "everyone" does it this way
    >and that my buyer will expect to do it like this when I sell my car. I
    >would rather pay the tax and not worry about being penalized for
    >breaking a tax law. Am I being wierd or is there a good reason to claim
    >my car as a gift?
    >
    >Brian


    Yes, it's been done, but as has been stated in this thread, many
    states have caught on and will tax you based on their book value if
    the selling price is too far below it. There are exceptions, though.
    In some states, a transfer is tax exempt if it is made between
    immediate family members. But that doesn't sound like it applies in
    your case.


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