Do you pay taxes when buying a used car from a private party?

[newParadigm]

Yeah, when u go to the DMV.

 

[d33pt]

yep..it's such a scam. the original buyer paid the full taxes when he bought it. then it keeps getting taxed when it changes hands. does not make any sense at all.

 

[puffff]

Originally posted by: waggy

Originally posted by: FrankyJunior

Originally posted by: NetWareHead
Sell the car for a dollar and pay only a few cents in tax. Then the rest of the money can be handled under the table.

Exactly. There's nothing illegal about selling someone a Bic pen for $10,000 and throwing in the car for free. Can even write up a mini-contract stating just that. There's nothing the DMV or IRS can do about it. As long as both parties are in agreement.

The DMV or IRS or whoever will just check with each party to see if you say the same thing.

If you buy the car for $10,000 and the seller leaves that blank empty on the title and you fill it in for $1... Then they will go ask the seller how much you paid for the car and if he says $10,000. you get in trouble and/or go to jail for fraud, tax evasion, etc.

hahahahah

bad bad advice. do not do this.

i did this in PA once. dmv sent me a letter explaining the $1 sale price. i explained that it was a gift from another family member (which was true) and we were just trying to change the name on the title. they accepted that explanation.

 

[smack Down]

Originally posted by: FrankyJunior

Originally posted by: NetWareHead
Sell the car for a dollar and pay only a few cents in tax. Then the rest of the money can be handled under the table.

Exactly. There's nothing illegal about selling someone a Bic pen for $10,000 and throwing in the car for free. Can even write up a mini-contract stating just that. There's nothing the DMV or IRS can do about it. As long as both parties are in agreement.

The DMV or IRS or whoever will just check with each party to see if you say the same thing.

If you buy the car for $10,000 and the seller leaves that blank empty on the title and you fill it in for $1... Then they will go ask the seller how much you paid for the car and if he says $10,000. you get in trouble and/or go to jail for fraud, tax evasion, etc.

I know Vermont will charge you "fair market value" ie blue book if you purchase the car private party.

 

[waggy]

Originally posted by: puffff

Originally posted by: waggy

Originally posted by: FrankyJunior

Originally posted by: NetWareHead
Sell the car for a dollar and pay only a few cents in tax. Then the rest of the money can be handled under the table.

Exactly. There's nothing illegal about selling someone a Bic pen for $10,000 and throwing in the car for free. Can even write up a mini-contract stating just that. There's nothing the DMV or IRS can do about it. As long as both parties are in agreement.

The DMV or IRS or whoever will just check with each party to see if you say the same thing.

If you buy the car for $10,000 and the seller leaves that blank empty on the title and you fill it in for $1... Then they will go ask the seller how much you paid for the car and if he says $10,000. you get in trouble and/or go to jail for fraud, tax evasion, etc.

hahahahah

bad bad advice. do not do this.

i did this in PA once. dmv sent me a letter explaining the $1 sale price. i explained that it was a gift from another family member (which was true) and we were just trying to change the name on the title. they accepted that explanation.

no you did not do what FJ said. you told them it was a GIFT. the DMV will look at a gift froma family member diffrent. they used to not tax it at all. Now in Il they charge you $20 (just did it last summer).

what he is saying is you buy this pen for $10k and the car is free. the DMV will NOT go for that. you will land yourself in some trouble.

 

[SonnyDaze]

Originally posted by: Bootprint

Originally posted by: NetWareHead
Sell the car for a dollar and pay only a few cents in tax. Then the rest of the money can be handled under the table.

Some places will make you pay the taxes on the value of the car not what you actually paid for it.

Yeah here in NC the DMV will tax it on the wholesale value of the car.