I would put $0 and “gift” on the bill of sale. However in some states, when you go to register it/change the ownership. The DMV will look up the blue book value of the car, and will charge sales tax based on actual value of the car. At least that’s what they did when I gifted a vehicle that I had inherited.
Chances are, varies by state, the DMV will require the recipient to pay sales tax on the value of the vehicle regardless of what you put on the bill of sale.
States have different policies. In Michigan at the Secretary Of State you just say sold to family member and they don’t tax you no matter what the sale price is. You have to check with the DMV in your state.
Your local DMV is the best source of info. My mother in law lived in MI when she passed away. My daughter in PA inherited her car. A classic little old lady only drove it to church on Sunday and walked most of the time ;). Great car, low miles but I digress. The DMV in PA only charged registration/plate fee and processed it as a family transfer without sales tax.
I would not do that. Why confuse things? Give him/her/them $100 then charge him/her/them $100 for the car. It’ll make everybody happier. You don’t have to report the $100 gift but you will have to report the excess value of the car if it is over $10,000 (or is it $20,000 now?), I do believe.
You might find an exemption form at your DMV online that allows you to transfer ownership between spouse or parent/child without sales tax and reduced fees.
I did not realize I had some fans. I still have my Porsche and love driving it every day! I ended up buying Porsche locally from dealership. There were lots of things involve buying out of state, from private party, method of payment and not to mention Pandemic.
This one is my other old car which I bought new and still has very low miles ($70K) and I just don’t drive it much.
+1
Just like virtually every type of regulation, this will vary from state to state.
In NJ, my father transferred a car to me for $1, which was far below the actual value of the vehicle.
Almost one year later, I received a letter from the State Treasurer’s office, informing me that I had to complete a sworn affidavit, affirming that it really was transferred for $1, and that if I didn’t do so, I would have to pay the sales tax on the assumed value of the car.
I completed the affidavit, signed it in the presence of a Notary, and submitted it. I never heard anything further on the issue, so I have to assume that–39 years later–I’m in the clear.
In Illinois when I registered a car that was given to me the DMV asked if the person who gave me the car was related to me. I said they were not. I got charged the $150 for the title, $151 for one year of registration, and the $25 tax payable by check or money order on a car that is over 20 years old.
Why would someone do that, when he could go to a website where anonymous people in different states, and of unknown legal credentials, could give him opinions that have no legal basis?
Yes, I still periodically wake up in a cold sweat, thinking… I wonder if this is the day when they’re finally going to come after me for that sales tax.
