Transfer of title question.
11-26-2002, 08:42 AM
#1
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Transfer of title question.
I'm in Colorado and my dad is in Wisconsin, and he is going to buy my s2000. Is there a way I can transfer the title to him, so that he doesn't have to pay sales tax on the car.
11-26-2002, 08:49 AM
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I don't think so.
The car is changing hands...so in that state's eyes, sales tax will be due when he registers the car.
He could tell the state that he purchased the car for $1, but I'm not sure what would happen in that case...since the book value on the car is significantly more.
If you try to skirt the sales tax, I would recommend he pay you for the car in multiple payments of less than $10,000/month. You don't want the IRS snooping around asking where the money came from either. I'm not sure if the IRS would contact the state if they suspected sales tax evasion, but you wouldn't want to find out.
He could tell the state that he purchased the car for $1, but I'm not sure what would happen in that case...since the book value on the car is significantly more.
If you try to skirt the sales tax, I would recommend he pay you for the car in multiple payments of less than $10,000/month. You don't want the IRS snooping around asking where the money came from either. I'm not sure if the IRS would contact the state if they suspected sales tax evasion, but you wouldn't want to find out.
11-26-2002, 08:50 AM
#3
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no...
legally, you have to pay sales tax when changing ownership, but how much sales tax you pay depends on what price you put down on the title when you sign it over. If you put $1, you'll pay salex tax on $1. Of course, $1 will look very suspicious to a DMV officer, and they may choose to look up a blue-book value instead. So, just put down a price that is low (but not totally unreasonable) to save some sales tax money.
11-26-2002, 08:52 AM
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What if both of our names were on the title,
and I just had mine removed, or left it on there. I'm not going to be driving the car anyway, since it will be 1100 miles away.
11-26-2002, 08:56 AM
#6
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hmm...
not sure in this case. Never heard of this before. If the assumption was that each of you owned 50% of the car, then you'd be selling your 50% to your dad for 50% of the car's price. So, you'd have to pay the sales tax on 50% of the car's value. But I'm just speculating here. You need to check your local state laws on this I'm afraid.
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11-26-2002, 09:01 AM
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Maybe...
I guess in response to Quattro Pete's post, depending on the state, even if you report a low sale price, they often use the blue book value anyway. That's my experience in VT.
Usually if the car is a "gift" there is no sales tax required for the new owner. Depends how attached you are to things like morals and ethics and the like, but I think you get what I'm saying. You could avoid it if you were so inclined.
Usually if the car is a "gift" there is no sales tax required for the new owner. Depends how attached you are to things like morals and ethics and the like, but I think you get what I'm saying. You could avoid it if you were so inclined.
11-26-2002, 09:03 AM
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Just giving it to him was one thing I was thinking of.
Money could be taken care of elsewhere. As far as morals go, the state of colorado already took me for $2500+ for tax and license plates, at least the car is staying in the family. 
