selling price or gift / transfer of title

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Brian - 25 Aug 2006 01:44 GMT

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?

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Edwin Pawlowski - 25 Aug 2006 03:00 GMT

> 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
[quoted text clipped - 3 lines]
> breaking a tax law. Am I being wierd or is there a good reason to claim
> my car as a gift?

Depends on the state. Some require proof of some sort that you are a
relative to receive the gift, otherwise you pay tax on the book value.

Sometimes when a car is sold privately, there will be two bills of sale.
One real, one showing many $ less, for the DMV to pay the sales tax. The
state does know that it is not often people give cars as gifts in real life.

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sdlomi2 - 26 Aug 2006 14:51 GMT

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Please Note New address
daniels_sam@bellsouth.net

Advertise it at what you want for it PLUS the tax on that amount. Then,
when your prospective buyer wants to dicker on price, tell him you'll cut
enough off to pay his sales tax. Then bill it out reflecting the true sales
price. (My personal feelings are that sales tax is one of the
most-nearly-fair taxes levied. And I sold cars for a living for ~25 years.)
Both can be made happy doing this, as well as avoid those 'free 6X8 rooms'!
All my 2 cents worth. s

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