"selling price" or "gift" / transfer of title

Is it true that when a private party sells a used car will claim it as
a gift (in California) so that both parties can avoid paying a tax?
This sounds like a law not worth breaking. But 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. What do I do?

Thank you,
Brian

"Brian" <btierny@gmail.com> wrote in message
news:1156452234.178850.187140@m73g2000cwd.googlegroups.com...[color=blue]
> Is it true that when a private party sells a used car will claim it as
> a gift (in California) so that both parties can avoid paying a tax?
> This sounds like a law not worth breaking. But 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. What do I do?
>
> Thank you,
> Brian
>[/color]

Are you really asking advice about violating the law or not? You need to
figure this one out for yourself, big guy.

"Brian" <btierny@gmail.com> wrote in message
news:1156452234.178850.187140@m73g2000cwd.googlegroups.com...[color=blue]
> Is it true that when a private party sells a used car will claim it as
> a gift (in California) so that both parties can avoid paying a tax?
> This sounds like a law not worth breaking. But 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. What do I do?
>
> Thank you,
> Brian[/color]

Rant time: I'm in NY state, but your situation sounds like a very
familiar/similar scenario.

I sold my '98 Corolla to my niece - although technically to my sister (niece
will get it as her own at some future point when in college) - 2 years ago.
It was a sale, not a gift, and we didn't want to skirt the law. But we knew
that selling to a family member is also tax-exempt.

So... went to the NYS DMV website & downloaded the pertinent form to fill
out. Only to read the directions & find out that the tax break is only for
a sale to a parent, step-parent, child, or step-child. No siblings
mentioned. But that didn't make sense considering that siblings are blood
relatives, where-as step relatives aren't.

So... my sister's husband (since he's retired, but both she & I had to work
that day) spent an entire day going to the nearby DMV offices & phoning
other ones (& being kept on hold for incredible lengths of time), trying to
get an answer. He was told maybe, yes - that they just didn't bother to
include siblings in the list, & no - all from various DMV people. He
finally phoned Albany (state capital office) who told him no - siblings
aren't included, but we could just list it as a gift & avoid the tax that
way! IOW - he was being told by the main office that we should just lie
about it! Arghhhh!

We actually considered it - until reading that in the case of being caught,
*each* party is fined $10K. We had no desire to take the chance of being
made expensive examples, so they paid the tax. Like the State didn't get
already enough tax dollars when I bought it new?! Double arghhh.

Then, it dawned on us that - given the motivation, I could've sold it to one
of my parents, then they could've turned around & sold it to my sister, &
both of those transactions would've been tax-exempt. Triple arghhh.

So... good luck!

Cathy


[color=blue]
>[/color]

"Brian" <btierny@gmail.com> wrote in message
news:1156452234.178850.187140@m73g2000cwd.googlegroups.com...[color=blue]
> Is it true that when a private party sells a used car will claim it as
> a gift (in California) so that both parties can avoid paying a tax?
> This sounds like a law not worth breaking. But 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. What do I do?
>
> Thank you,
> Brian[/color]


I don't know about the 'gift' law with regard to California DMV, but one
thing you probably shouldn't try
is to falsify the sale price (at least too much.) If you march into the
DMV and tell 'em you paid $800 for a two year old
Cadillac, they'll likely ask you whether it's in a bushel basket,
disassembled. They may be bureaucrats, but they're not
stupid, and they've heard all the lame excuses over and over.

"mack" <mackerel@dslextreme.com> wrote in message
news:12esd983ou7mf8@corp.supernews.com...[color=blue]
>
> "Brian" <btierny@gmail.com> wrote in message
> news:1156452234.178850.187140@m73g2000cwd.googlegroups.com...[color=green]
>> Is it true that when a private party sells a used car will claim it as
>> a gift (in California) so that both parties can avoid paying a tax?
>> This sounds like a law not worth breaking. But 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. What do I do?
>>
>> Thank you,
>> Brian[/color]
>
>
> I don't know about the 'gift' law with regard to California DMV, but one
> thing you probably shouldn't try
> is to falsify the sale price (at least too much.) If you march into the
> DMV and tell 'em you paid $800 for a two year old
> Cadillac, they'll likely ask you whether it's in a bushel basket,
> disassembled. They may be bureaucrats, but they're not
> stupid, and they've heard all the lame excuses over and over.[/color]


I just sold my old lincoln a few months back for a grand total of a $1. My
friend who bought it never had any problems registering it.

Brian, 8/24/2006,4:43:54 PM, wrote:
[color=blue]
> Is it true that when a private party sells a used car will claim it as
> a gift (in California) so that both parties can avoid paying a tax?
> This sounds like a law not worth breaking. But 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. What do I do?
>
> Thank you,
> Brian[/color]

In VA you pay tax on the NADA value of the vehicle regardless of the
selling price.

--
"Good judgment comes from experience, and a lot of that comes from bad
judgment." ~ Will Rogers

Brian wrote:[color=blue]
> Is it true that when a private party sells a used car will claim it as
> a gift (in California) so that both parties can avoid paying a tax?[/color]

Many states simply charge you the tax based on average sale price unless
you're related in very specific ways (brother, sister, father, mother,
etc...), regardless of the bill of sale price from a private party
transaction. Aunt, uncle, cousin are often not included.

Personally, as a seller, what's in it for me to commit fraud? Nothing!

"B A R R Y" <balsapilot@yahoo.com> wrote in message
news:5gBHg.3696$q63.2901@newssvr13.news.prodigy.com...[color=blue]
> Brian wrote:[color=green]
>> Is it true that when a private party sells a used car will claim it as
>> a gift (in California) so that both parties can avoid paying a tax?[/color]
>
> Many states simply charge you the tax based on average sale price unless
> you're related in very specific ways (brother, sister, father, mother,
> etc...), regardless of the bill of sale price from a private party
> transaction. Aunt, uncle, cousin are often not included.
>
> Personally, as a seller, what's in it for me to commit fraud? Nothing![/color]

When selling to a sibling & they are not included in the "family members"
tax-exempt status - yet step-parents & step-children are, it's mighty
annoying!

Cathy (NYS, where such is the case)

"B A R R Y" <balsapilot@yahoo.com> wrote in message
news:5gBHg.3696$q63.2901@newssvr13.news.prodigy.com...[color=blue]
> Brian wrote:[color=green]
>> Is it true that when a private party sells a used car will claim it as
>> a gift (in California) so that both parties can avoid paying a tax?[/color]
>
> Many states simply charge you the tax based on average sale price unless
> you're related in very specific ways (brother, sister, father, mother,
> etc...), regardless of the bill of sale price from a private party
> transaction. Aunt, uncle, cousin are often not included.
>
> Personally, as a seller, what's in it for me to commit fraud? Nothing![/color]

To get back to this last part of your post...

If other states' paperwork is similar to that of NYS's, then yes, there is
an incentive, unfortunately: the sale of the car you're trying to unload.

*Both* parties have to fill out the paperwork; not only does the buyer have
to fill out, sign, & submit a form declaring the car to be a gift, but so
does the seller. If one seller refuses to do it, the buyer - wanting to
save a few (to several) hundred bucks, may very likely go to another seller
instead - who is willing to do it.

Cathy

Cathy F. wrote:[color=blue]
> If one seller refuses to do it, the buyer - wanting to
> save a few (to several) hundred bucks, may very likely go to another seller
> instead - who is willing to do it.[/color]

Possibly, but not in my experience.

Before my state passed the "book value" tax rule, I was asked on several
occasions to put a fraudulent price on a bill of sale. The vehicles
ranged from $500 used vans to a $15,000 one-year old Jeep. I refused
every time, and I sold the car every time.