im just curious if anyone here would have any insight for me on this topic as i may be working out a deal that involves trading my a4 for another vehicle.
now my question is the sales tax for such a transaction…more specifically the dmv form “DTF-802” (as seen here: http://nysdmv.com/forms/dtf802.pdf )
this form involves obtaining a vehicle by way of “gift”.
im curious since ive never traded a vehicle before would i be eligible to use this form since there would be no money trading hands and ive already paid sales tax on my current vehicle in NYS.
if you open up the form and look at section 7c it has a specific traded/swapped vehicle section…
obviously i dont want to have to pay shitty NYS tax on another 14k.
My NYS tax rule of thumb, if you’re not sure you’re paying tax, you’re paying tax. I thought only gift transactions were for family members, but I’m probably wrong. Sucks how many times you pay tax over and over again. Let us know what happens.
Not paying tax is only allowed if a family member gives it to you, like whwn my dad gave me the g wagon I paid no sales tax. If you traded, you pay tax on the fair market value of what was traded, unless you lie and say you paid $xxxx. Nys sucks, and they love sticking it to you for dumb shit like this
Well according to the second paragraph of the form, it says that section 6 must be completed if the gift is to someone other then a spouse, parent, child, or step child. I traded vehicles once LONG LONG ago. if my shitty asshole memory is correct, they gift it to you, and you gift yours to them.
I always understood in NY you only pay tax on the difference in the transaction.
In MI you pay the whole amount, regardless of a trade in. I am sure a dealer or someone with more knowledge will speak up. Maybe you have the wrong forum?
Then I would do this. Obviously not for $150 but if you’re gonna have to pay tax you might as well try to save a little on it by chopping the sales price and backing it up with a claim like rolling chassis or something. That will require the seller to fill out a specific form stating that the car they are selling is below fair market value but it will save you money on the tax.
I went through this when I legitimately purchased a newer vehicle at a low price. A friend of the family sold me a newer car that needed work but still dirt cheap.Like 6 months later he received a audit form asking for proof that I actually paid him the said amount.I gave him a copy of my bank statement showing the withdraw for the amount that I paid,he sent it in and its been over a year and they never asked for anything else. :gotme:
The letter stated that they have no idea as to what condition peoples vehicles are in and they just need more proof.
Well if you only pay sales tax on the difference between your trade and the new vehicle at a dealer, I dont see why it would be any different in a private transaction. If you detail this in a contract stating you traded your vehicle for another with no additional funds exchanged I would imagine you could avoid the tax. Take a look at the DMV sales tax form on their website.
Hmm I looked into this some more and it seems like your fucked by the way form DTF-802 reads. Check out section 5 where it states value of property traded, then you calculate sales tax on that value in addition to any other payment.
Seems like you really get screwed with private transactions with sales tax when having a trade.
Purchase price Value
a. Amount of cash payment… 1a $
b. Balance of payments assumed… 1b $
c. Value of property given, traded, or swapped, or services performed instead of cash payment… 1c $
d. Purchase price (total of lines 1a, 1b, and 1c)… 1d $
Notice how they count value of items traded the same as cash? That’s because you’re required to pay sales tax on the total value of the deal. Line 1c on your form will be the value of your A4, line 1c on the other guy’s form will be the value of the car he traded to you.
The section about gifting does not apply because:
You’re not qualifying family members.
Even if you were, it’s not a gift if you are swapping vehicles of similar value.
So yeah, you’re both better off recording it as a “sale” and signing bills of sale for an amount as low as you think you can get away with. I’m guessing they don’t allow a trade in allowance tax deduction on private party trades because there is way too much potential for sales tax fraud. Anyone buying a used car would claim they traded some other car to the person to take the tax deduction on the sale price. With no recording requirements for the other party (they don’t HAVE to register the car you traded them) it would be very hard to track down non-existent “phantom trades”.
Texas started doing this presumed valve on cars which really sucks. Now I have to pay off a certified estimator to give me a written value of next to nothing to give the DMV.
