thwyld1

I'm selling a used motorcycle to a friend of mine. I was informed by the notary that he has to pay sales tax on the purchase price. Is there any reason that I can't tell them the purchase price was $1000 or even $100 to save him some money? I've been thinking on this for a few days and I can't see a down side. He's paying me in cash.

Thanks

Endoplasmic

if they question your sale price (which they never do) just say that it was sold with the intent that he was going to repair it.

MaxHedrm

Other than that, no. Dealers fudge prices all the time on trade-ins.

thwyld1

the "man" as it were, shouldn't be able to collect on the same money twice!

GeTT da NeTT

Both of you can get into trouble, though chances are you won't. I would not recommend it.

GeTT da NeTT

He is not. You are apparently not an accountant.

MaxHedrm

The idea on a trade in is that you get a discount off your new car sales tax for the value of your trade, since the dealer is going to turn around & sell it & collect sales tax. Dealers often put down a value higher than what they pay you for the tax man. Hell, I got $16k trade in value on a totalled GTi that the Insurance company wrote me a check for. The dealer certainly didn't get that car.

The only time the 'shouldn't be able to collect on the same money twice' rule applies is if you are buying something for resale. So if he was buying it from you to reseel & was gonna charge sales tax on the later sale & has a state tax ID, then you could not charge him the tax.

Of course this is all based on my knowledge of Texas tax rules...

bubba j

declare the excess value of the bike as a "gift."

bubba j

That depends on the state.

bubba j

You would be committing tax evasion, and if you really lowball the price, he could have trouble at the DMV when he registers.