Recording _car sale at a lower price
Recording _car sale at a lower price
A friend of mine is selling a car and the buyer is insisting on putting an official price lower than the actuals in the title. Has anyone been in a similar situation? What are the implications of doing this?
Recording _car sale at a lower price
I am not seeing any other reason from Sales tax. anyways, one of my friends got a letter from Ohio transport department for registering vehicle much lower than the market value( not sure how they measure this ) and was asked to pay the difference of the sales tax.
Recording _car sale at a lower price
I'm my opinion, the laws differ from State to State. The State is only interested in getting it's fair share of sales tax (which also differs). As long as the seller and the buyer are in sync, one can easily get away with a reasonably lower price tag (where-in the buyer ends up paying less sales tax). The State can hardly do anything if the seller states that the car was not in a good condition and the buyer bought the car by taking a risk or something along those lines.
I've helped a bunch of our friends coming on short term work visas to buy used cars and it is quite common - at least in some of the States where I've lived. In all the cases, I let both the seller and the buyer know the ground realities and usually let them make a decision.
In reality, one can get away without paying sales tax if the buyer is a blood relative to the seller (at least in some States - not sure if it's true in all the States). Also, I've known an instance when an individual bought a car from one of his real close friends and got away without paying taxes by first becoming a co-owner and after a couple of months did the necessary paperwork to become a sole owner (this is highly risky and not sure if it's legal).
My 2cents for whatever it's worth.
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People indulge in a lot of unethical ways to evade taxes...invariably it depends on one's moral values. -DJ :cool:
I've helped a bunch of our friends coming on short term work visas to buy used cars and it is quite common - at least in some of the States where I've lived. In all the cases, I let both the seller and the buyer know the ground realities and usually let them make a decision.
In reality, one can get away without paying sales tax if the buyer is a blood relative to the seller (at least in some States - not sure if it's true in all the States). Also, I've known an instance when an individual bought a car from one of his real close friends and got away without paying taxes by first becoming a co-owner and after a couple of months did the necessary paperwork to become a sole owner (this is highly risky and not sure if it's legal).
My 2cents for whatever it's worth.
================================================
People indulge in a lot of unethical ways to evade taxes...invariably it depends on one's moral values. -DJ :cool:
Recording _car sale at a lower price
I don't understand the logic of the state collecting tax on car sale. It does not collect sales tax on home sale or none of the garage sale items or any other items that are sold second hand.
Based on post #2, even if the state wants its due share, it may go after the buyer of the car and not my friend, the seller. Based on #3, this does not seem to be an uncommon thing. Thanks for the responses.
Based on post #2, even if the state wants its due share, it may go after the buyer of the car and not my friend, the seller. Based on #3, this does not seem to be an uncommon thing. Thanks for the responses.
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Old-Spice2
- Posts: 1898
- Joined: Wed Jan 17, 2007 11:38 pm
Recording _car sale at a lower price
>>>I don't understand the logic of the state collecting tax on car sale. It does not collect sales tax on home sale or none of the garage sale items or any other items that are sold second hand.
For homes, state collect property tax which is increased every year. For garage sale, it is hard to document and track. For cars, since you need to go to DMV for registration, they can catch you there. I agree, state should not collect sales tax multiple times for the same object.
For homes, state collect property tax which is increased every year. For garage sale, it is hard to document and track. For cars, since you need to go to DMV for registration, they can catch you there. I agree, state should not collect sales tax multiple times for the same object.
Recording _car sale at a lower price
layman;23306A friend of mine is selling a car and the buyer is insisting on putting an official price lower than the actuals in the title. Has anyone been in a similar situation? What are the implications of doing this?[/quote]
Pardon my question which may sound Racially Insensitive to some, but was the buyer somebody from The South Eastern Part of Asia (Some of the Countries in that region include China, Taiwan, S. Korea and a few others)? I ask only because when I sold my car last year, I had to face a similar predicament, I obliged to the gentleman's request, we haven't heard from each other ever since, so i assume he wasn't contacted by the DMV.
Recording _car sale at a lower price
ashMan;23390Pardon my question which may sound Racially Insensitive to some, but was the buyer somebody from The South Eastern Part of Asia (Some of the Countries in that region include China, Taiwan, S. Korea and a few others)? I ask only because when I sold my car last year, I had to face a similar predicament, I obliged to the gentleman's request, we haven't heard from each other ever since, so i assume he wasn't contacted by the DMV.[/quote]
Mera Bharat Mahaan:)! He is a fellow desi and he is saying that all his friends do this.
Recording _car sale at a lower price
layman;23447Mera Bharat Mahaan:)! He is a fellow desi and he is saying that all his friends do this.[/quote]
A lot of ppl. do this. A gora(seller) offered to do this for one of my desi friend's(buyer) and he took it.
One thing to look into is...you can claim a deduction if you buy a car and sell a car or vice versa...kind of like trading in your car. If you sold your car for 7K and bought another one for 10k...you would owe taxes only on 10k minus 7k = 3k. This is perfectly legal.
Recording _car sale at a lower price
MadMax;23452A lot of ppl. do this. A gora(seller) offered to do this for one of my desi friend's(buyer) and he took it.
One thing to look into is...you can claim a deduction if you buy a car and sell a car or vice versa...kind of like trading in your car. If you sold your car for 7K and bought another one for 10k...you would owe taxes only on 10k minus 7k = 3k. This is perfectly legal.[/quote]
This is a good tip.
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LLLLWhenR2I
- Posts: 222
- Joined: Tue Jan 16, 2007 3:12 am
Recording _car sale at a lower price
Madmax # 8.
You totally confused me. When you sell your car you don't pay any taxes and the seller would bear the brunt but at the same time if you buy a car worth 10K, DMV/State will charge you taxes on entire 10K. They would n't look at the amount at which you sold the car.....I strongly believe there is some misformation here.
You totally confused me. When you sell your car you don't pay any taxes and the seller would bear the brunt but at the same time if you buy a car worth 10K, DMV/State will charge you taxes on entire 10K. They would n't look at the amount at which you sold the car.....I strongly believe there is some misformation here.