ive never done this before. so im thinking about trading my car with someone. what exactly has to be done.
i know you would sign over each others titles, but as for registering purposes what has to be done? are taxes to be paid?
my car is a 95 and his is a 96 if that matters.
thanks
Hmm. I thought about this before and never bothered to look into it. Good question.
I think i would just write eachother receipts for like 200$ and sign over the titles… but idk
same.
I think they calculate tax based of fair market value of the vehicle otherwise
Yep you have to pay taxes on the vehicle that you are registering.
You don’t pay tax when you have a trade in at a dealer, why would you private party?
either you write bills of sale saying both cars were sold for $xxx or you say they were traded. if you say they were traded you pay the tax for “fair market value” for the car. much easier and cheaper to just say they were both sold for a couple hundred $ if its believeable
nys, what a crock of shit. making you pay sales tax on a used car :bloated:
this is what i was thinking of doing.
very true…thats why im stuck.
ruh roh…what are you considering trading for?
aren’t you ever happy? lol
edit: i would just write each other a receipt for a couple hundred like everyone else suggested. Prob. the easiest/cheapest way.
You are definitely suppose to pay taxes on the fair value. Dealer’s are an exception because they are running a business.
neva!
it’s a secret!
Speaking from a recent experience, the DMV would not accept a bill of sale for such a low amount because it was “below fair market value for the car.” So I had to have the seller fill out SECTION 6 of this form:
http://www.nydmv.state.ny.us/forms/dtf802.pdf
The seller had to sign it stating the car was being sold at below fair market value. Otherwise they were going to make me pay taxes for what they thought was fair market value for the car. In that same section, there is a spot for sellers who agree to trade their cars. I think each party involved will have to fill one out for each other to take to the DMV for when you register your new car. You will still have to pay taxes, but it should not be as much as a regular private party sale I think.
On the sales tax form, it asks right on it for the value of any work performed or trades received. I don’t bother to ask New York why, I just pay like everyone else. I was also under the impression that if the dealer tries to sell the trade-in, sales tax for the sales price must still be paid by the end buyer so New York ends up getting their money from someone.
Unfortunately, you still have to pay taxes on market value unless it is marked that the car is in poor condition. Also, regardless of how much I buy or sell a car for, I always fill out or have the other person involved fill out the seller’s portion of the sales tax form. I had 2 bad experiences with the dmv when I was younger because I failed to so I will never take the chance again.
Does any one know how they decide “fair market value”?
Pretty sure it’s just NADA data.
I’m curious what someone like Pauly has to say about section 6 of the selling form. Like how much can you get away with if you have a generous seller who is willing to sign it saying they sold it well below market value? If the seller signs that they sold a 20k car for 2k will the DMV require additional paperwork or is it as simple as needing both parties (buyer and seller) willing to lie?
a friend of mine got in a bit of trouble for reg’ing his 2002-ish car for really cheap, i think it was around $1000. he just had to pay a few hundred $ and it was all taken car of
on the other hand, i reg’d my 95 acura integra with a bill of sale for $50 with no issues. i didnt pay much more than that for it, but the car booked much higher, around $2k
That sucks, I wasn’t sure if there were any tax breaks for trading or not.
My complaint is, what if you did buy a wrecked vehicle, or a rolling chassis, ect? Let’s say it is a 20k car, and maybe you get it for under 10k to be somewhat realistic. The DMV will still want you to pay taxes on the car valued at 20k simply because that is what they determined to be the fair market value. There is no established value for cars that fall under these categories. There’s no alternative route besides having the seller say that it was sold “below fair market value.”
Interesting, I got rejected for a $500 bill of sale on a 98 teggy.:sword:
I have no idea since my job has nothing to do with registration. but next time i’m at a local office talking to someone i know i will try to find out