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Old 01-26-2010, 04:29 AM   #1
Snyder
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Planning on buying a car from my mother-in-law's work. The company she works for leases vehicles for their sales reps. When they come off lease, the rep is allowed to buy it. Unfortunately, only the employee can buy it. One of her coworkers has been kind enough to help us out. We wrote him a check for the car, and he's going to cash the check and turn around and buy the car. He's then going to transfer the vehicle over to us. My question is how do I get out of paying sales tax twice? In Ohio, you can only gift a car to a relative, & I don't want to put her co worker in the position to lie about it. Any thoughts?

 
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Old 01-26-2010, 04:55 AM   #2
TXCrash
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Buy the car for $1

Pay the balance for something else...
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Old 01-26-2010, 05:26 AM   #3
Snyder
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I thought about that idea. A guy I work with said not to do it. It raises a big red flag, & they'll give me a hard time.

 
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Old 01-26-2010, 05:33 AM   #4
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There is a limit of $12,000 annually in Ohio for a single person to give away as gift. And if any tax is due on the gift, it is paid by person who makes the gift and not the recipient.

The IRS also allows you to give up to $13,000 in 2009 and 2010 to any number of people, every year, without facing any gift taxes, and without the recipient owing any income tax on the gifts.
-Turbo Tax
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Old 01-26-2010, 05:36 AM   #5
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Some more FYI:
You and your spouse together can give up to $26,000, per year to any number of individuals.

You can give up to $1 million in gifts that exceed the annual limit—total—in your lifetime, before you start owing the gift tax.

If you have 1,000 friends on whom you wish to bestow $13,000 each, you can give away $13 million a year without even having to fill out a federal gift-tax form
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Old 01-27-2010, 02:53 PM   #6
Snyder
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I don't think gifting money and a vehicle are the same thing. The snag for me is getting the title. I think I've got it figured out though.

 
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Old 01-27-2010, 03:05 PM   #7
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Since this guy is violating company policy, in spirit at least, don't do anything that is going to make anybody ask questions and wind up getting him fired.

Why isn't your mother in law buying the car?

 
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Old 01-27-2010, 03:10 PM   #8
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Titles are easy, you can write anything you want on there if the seller is cool with it. Just write $500 on there the tax won't be much at all. If they say anything, just say, it's in pretty bad shape. But they won't. You're buying a car, paying the tax is part of the expense.
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Old 01-27-2010, 03:13 PM   #9
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can't your mother in law buy it, and gift it to your wife?

 
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Old 01-27-2010, 03:28 PM   #10
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Quote:
Originally Posted by curtis97322 View Post
Buy the car for $1

Pay the balance for something else...
When he goes to the DMV they may base the tax he owes on the fair market value of the car. They do that in MD so people cannot do the $1 thing. I hate how greedy the damn government is.
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