Registering a used car as a gift?

[jerseygirl81]

My ds is getting his license and my Mom & Dad are giving my brother my Moms car since she can't drive anymore and its only a couple of years old and they don't want to give a somewhat newer car to a new driver so they are giving it to my brother and he is giving my ds his car. My brother called motor vehicles and the woman said to put on the title that its a gift, but does that mean we would have to pay a gift tax on it? Would we be better off putting it on the title as much less than the value? Thanks, Linda

 

[hlkeck]

Sell it to him for $1. Check your state's tax laws, however (Disclaimer: this is not meant to be legal advice).

Here in Ohio, we did that but then had to provide a letter later to the tax dept that we, did in fact, intend to sell it for a dollar and why...

 

[howlongtildisney]

Here's an IRS website about the federal gift tax - good luck! http://www.irs.gov/businesses/small/article/0,,id=108139,00.html

 

[Judique]

My ds is getting his license and my Mom & Dad are giving my brother my Moms car since she can't drive anymore and its only a couple of years old and they don't want to give a somewhat newer car to a new driver so they are giving it to my brother and he is giving my ds his car. My brother called motor vehicles and the woman said to put on the title that its a gift, but does that mean we would have to pay a gift tax on it? Would we be better off putting it on the title as much less than the value? Thanks, Linda

I see that you are in New Jersey and I am in Maryland, but we went through a similar situation with my kids. MVA said to make it a gift in which case the sale would be tax exempt and also does not need an inspection so long as it is titled in state. In Maryland you could use this method with immediate family parent to child, uncle to nephew,etc. Perhaps it is somewhat similar in your state - good luck!

 

[disney1990]

Also in Maryland, you have to have paperwork showing the relationship. I had to have my daughter's birth certificate when I transferred a vehicle to her.

 

[jerseygirl81]

Thanks for the info. I did find out that in NJ a vehicle given as a gift is exempt from sales tax, but I'm also trying to find out if we would have to pay on our taxes a gift tax. Linda

 

[dis-happy]

What's the value of the car? Typically, the person getting the gift doesn't pay the tax. If the car is less than $13,000 (or $26,000 if two people are giving the gift jointly) you should be find as far as federal tax goes.

 

[jerseygirl81]

What's the value of the car? Typically, the person getting the gift doesn't pay the tax. If the car is less than $13,000 (or $26,000 if two people are giving the gift jointly) you should be find as far as federal tax goes.

The car my brother is giving us is worth about $4,000 and the car my Dad is giving my brother is worth about $12,000 so that would be good since they both fall under the $13,000 you mentioned. Thanks for the info. Linda

 

[horseshowmom]

This thread gave me my laugh for the day. After all the extravagant wedding shower and baby shower registry threads, I did a double take when I read this thread title.

Glad to see a car isn't something somebody has added to their list!