I was selling my TSX.

During the process, the couple that was buying my car did not know they had to pay on the car and came a big debate about if the DMV would know if we claim it as a gift.

Neither of us wanted to take any risks so paid the full amount, but my friends told me that everyone writes it off as gifts.

I mean, if it's a $12k car, I feel you can give it as a gift, but not so sure if the car goes $20k+.

Anyone have any tips/knowledge on this?

 

there is a max gift you can give a person per year (i believe it is 10k, my knowledge may be outdated on that amount though).

So if you give your sibling a 20k car, only 10k is a tax-free gift; for the other 10k, your sibling has to pay taxes on it (taxes are paid by the recipient of a gift)

What you're suggesting is borderline tax fraud
1. "Give" a 10k car to someone
2. Said person "gives" you a 10k check
I dont think the irs would look too kindly on that if you were audited

 

Trying to convince the tax folks that you gave a stranger a gift of 10k is going to be a tough sell.

 

Here this link might help

http://www.irs.gov/faqs/faq3-3.html

 

If you get audited you're going to have a VERY difficult time convincing an auditor that is a legit gift.

Sadly, this reminded me of my beloved old '89 Legend which I had since new and I actually did donate to a charity organization recently since it needed more work than it was worth. I told them exactly what was wrong with it and they were happy to get it anyway.

 

i would've taken your 89 legend for free.

 

stranger I wouldnt risk it

giving an old car to a family member, yes

Hmm wonder if I can write off giving my younger cousin my old laptop

 

Thanks guys.

 

My dad gave me the title to my first car as a H.S. graduation gift, it was only worth $3,000, but we were NOT able to claim it as a gift...

 

Depends on the state

Here in PA its perfectly legal to give a family member a car, bike, etc... and not pay taxes. They even have a form for it at the DMV. Ive done it many many times

 

here in WA i just sold my 02 accord to my brother. i didnt even have to ask, DMV insisted i wrote down "gift" on the title and said i wouldnt have to pay any taxes

 

As Bob Dylan said:

are you a tax deductible charitable organization?