On The Selling Of My Car

[Danny]

I'm selling my car to my daughter. I'm filling out the transfer of Title form right now. I'm looking at a section about sales tax that looks like something a dealer would fill out doesn't give much instruction on whether a private sale requires us to send sales tax to the state.

When in doubt who you gonna call? The ER Forum of course!

 

[Texas Proud]

I'm selling my car to my daughter. I'm filling out the transfer of Title form right now. I'm looking at a section about sales tax that looks like something a dealer would fill out doesn't give much instruction on whether a private sale requires us to send sales tax to the state.

When in doubt who you gonna call? The ER Forum of course!

Don't know what state... but in Texas you do pay taxes... when she takes it in to get the title in her name she will pay the sales tax...

Some have a 'gift' section if it is in the family and there is a small tax for that..

 

[Martha]

Only the dealer has to fill out the sales tax part of the form. However, when you register a vehicle in Minnesota you have to pay the sales tax unless there is an exemption. There may be an exemption for a transfer to a relative, but I can't remember and it probably only applies to a gift anyway.

She should bring her checkbook with when she does the title transfer.

 

[Danny]

Thanks Martha & Texas.

 

[Sam]

How about gifting it to her? In Texas, there would not be any sale tax involved, just a fee around $20.

 

[Goonie]

.......when you register a vehicle in Minnesota you have to pay the sales tax unless there is an exemption. There may be an exemption for a transfer to a relative, but I can't remember and it probably only applies to a gift anyway.

She should bring her checkbook with when she does the title transfer.

Same here in IL. If it's immediate family they don't have to pay sales tax. (Unless that got changed again in the last few years)

 

[Moemg]

There is usually a place to put in price paid .You just put in a real low value and that is what she is taxed on .

 

[cute fuzzy bunny]

Minnesota exempts sales/transfers between most immediate family members, including father and daughter.

So does California and IIRC Massachusetts, for what thats worth.

I think california's rule has a curveball or two, something to do with two siblings that are over a certain age have to pay the tax when transferring between them.

 

[Goonie]

There is usually a place to put in price paid .You just put in a real low value and that is what she is taxed on .

In IL they don't care what amount you actually paid for the car, they base the sales tax on it's fair market value. Which really sucks if you fall into a good deal!

A friend of mine bought a car from a guy that just wanted to get rid of it because it needed some very minor repairs, but he didn't want to mess with it. My friend paid $700 even though it was valued at about $2300(+/-). He had to pay $161 sales tax, instead of $49 which would have been the tax on his actual cost! He even had a bill of sale, but the IL law mandates market value. That's stupid!

 

[OAG]

Since Dan's profile says MN - CFB has the applicable information.

 

[Danny]

How about gifting it to her? In Texas, there would not be any sale tax involved, just a fee around $20.

Wasn't thinking straight..I am giving it her!...I was looking at $500 tax when I realized it's coming out of the money I'm giving her when she's 25. So it is a gift.
I'm now looking at a form that promises unspecified jail time and fines for both of us if we are misleading them.

Minnesota exempts sales/transfers between most immediate family members, including father and daughter.

So does California and IIRC Massachusetts, for what thats worth.

I think california's rule has a curveball or two, something to do with two siblings that are over a certain age have to pay the tax when transferring between them.

You're amazing Compact Flourencent Bulb...I'm sure it's true if you say it is, it just doesn't mention that exemption on the Title...besides I'm going with the gift angle and the gift affadavit/ form that we are going to swear to in front of a deputy is clear and very scary...

 

[cute fuzzy bunny]

Ick, I screwed it up. MN changed its law in 2000. Used to allow tax free transfers within immediate family, but now only allows that if its a gift with no money changing hands.

 

[Danny]

It turns out you were right CFB. Didn't have to fill out & swear under penalty that it was a gift ...immediate family=tax free in MN...they were so nice and helpful..reminded me just how nice Minnesotans are...

 

[Sam]

Wasn't thinking straight..I am giving it her!...I was looking at $500 tax when I realized it's coming out of the money I'm giving her when she's 25. So it is a gift.
I'm now looking at a form that promises unspecified jail time and fines for both of us if we are misleading them.

OTOH, you can always use the $500 saving for bail money.

 

[OAG]

Real life knowledge in Florida. Understate the value of the car by EITHER of the parties. Common that the Seller just leaves the block blank and lets the buyer fill in the number. If the state does not like the # they send the buyer a letter stating basically "prove it under oath" OR pay the difference in the (State) assumed tax TIMES 3. If you make the under oath statement of the lower price they go to the Seller and make the same proposal with a warning about perjury. Now if the Seller states a higher price -- then the Buyer is not only subject to the "triple the tax" deal but can be prosecuted for FRAUD depending if the local Prosecutor has the time and desire to continue (some will). Not worth the few bucks saved.

Does not apply to this transaction as it has evolved but, this is what can happen, at least in Florida.

 

[FinallyRetired]

I'm selling my car to my daughter. I'm filling out the transfer of Title form right now.

Piece of advice, also go to DMV and have the registration taken off your name. With some states, if you don't do that you remain liable until she registers it in her name.

 

[Texas Proud]

Piece of advice, also go to DMV and have the registration taken off your name. With some states, if you don't do that you remain liable until she registers it in her name.

Good advice for anyone selling a car.... I sold one back in '04 and found out about 5 months later the guy had not yet registered.... looked up on the state web site and found I could register that I had SOLD the car and was no longer liable for anything that involved the car... the cost was minimal

The guy came back months later and said he had lost the title and could I send him another... well, pay me X dollars for my filing and then filing to get a new title and you got it... he did..