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Old 07-21-2004, 02:16 PM   #16 (permalink)
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Originally posted by dholly

I have some question with this whole ownership transfer thing. If the car is purchased and registered in your father's name and then "gifted" to you in December, you will need to re-title and re-register it in your name. At that time, I suspect two things will happen:

1.) The DMV will want to collect an "imputed" tax on the transfer value of the vehicle. I.e., on the DVM forms in my state, one question directly asks if the title transfer is from a family member. And, at only a few months old, there's no way you're gonna convince the DMV that the value is much, let alone any, less than the original purchase price. Does that mean you will end up, in essence, paying a "double tax"?

2.) The market value of the "gift" will be in excess of the $11,000 amount eligible the annual gift tax exclusion. This means that, assuming a $31,000 value, your father is responsible for reporting and paying gift tax on the $20,000 balance.

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<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

Wow, we don't have that in HI. Man NY really wants to get you over a barrel and double tax you guys.

Like dholly points out, you do not want this to be considered a "gift." I thought that you would be responsible for the tax on the balance, but not really sure because I've never been in that position.

In any case good luck.
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Old 07-21-2004, 02:24 PM   #17 (permalink)
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What suks is i'm in cali...since i'm 18 i don't pay any attention to whats going on with politics...but i remember Arnold saying something about car taxes but i'm not sure what about car taxes...anyone know?
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Old 07-21-2004, 02:53 PM   #18 (permalink)
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">....Ahh...see this is what my dad and I feared. So basically what is happening is that we are paying tax for the car the first time we buy it...then again when he "gifts" it to me in december...right?<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">Yes, and it gets worse. The Federal gift tax has nothing to do with the DMV. So, taxed twice (sales tax) on the purchase PLUS the fed gift tax. Check on the Cali DMV site for particulars about the sales tax (and possibly other) ramifications upon transfer. Maybe your Dad could co-sign and put you as an additional insured on his policy for the 2-3 months until you get your own insurance. I am a bit confused, though. I had a car titled and registered in my name and also my own insurance before I was 18. What's the hitch with that in your case?

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Old 07-21-2004, 03:41 PM   #19 (permalink)
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Hm...you bring up a good point...why not just buy the car under my name....i think the main issue with my parents is that if i'm under 18 and I get into a car accident they can still be considered liabel for me because I am not considered an adult. Therefore whoever sues me can sue them. Once I turn 18...if i get into an accident I'm on my own...they can't sue my parents for anything...

I think thats what my parents are getting at...I'll talk to my dad later today...once i get out of school...
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Old 07-21-2004, 05:57 PM   #20 (permalink)
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Hm....Look what I found on the Cali Dmv Website...
http://www.dmv.ca.gov/pubs/brochures/howto/htvr1.htm



What Does Transfer Mean?

When the Department of Motor Vehicles (DMV) talks about "transfer," we mean a change in the registered or legal ownership of a California registered vehicle. When a vehicle changes owners, whether by sale, gift, inheritance, etc., and the new owner's name is placed on the department's records, that's a transfer.

For example, when you sell a car:

1. You and the legal owner/lienholder (the person, bank, credit union, etc., that financed the vehicle) if any, release interest/ownership of the vehicle by signing the Certificate of Title.

2. The signed title and any other required documents are submitted to DMV for transfer of ownership into the new owner's name.

3. Following completion of the transfer, DMV will issue a new Certificate of Title to the new owner(s) or if there is a lien, to the lienholder.

Are Transfer Requirements Different Between Family Members?

Yes. This information outlines the differences between a regular transfer and a family member transfer.

What Is a Family Member Transfer?

A "family transfer" is when ownership is transferred to or from a:

* spouse
* parent
* child
* grandparent
* grandchild
* siblings

How Is a Family Member Transfer Different from a Regular Transfer?

There are three primary differences between regular transfers and family member transfers:

1. A regular transfer requires smog certification in most cases before the vehicle can be registered in the new owner's name. A family member transfer does not require smog certification (See Smog Certification section) if the vehicle is currently registered and the biennial smog inspection is not due.

2. On a regular transfer, use tax based on the purchase price of the vehicle is due at the time of transfer. A family member transfer is exempt from use tax with the exception of a transfer between brother and sister who are not minors. A brother and sister transfer is exempt from smog certification regardless of age, unless a biennial smog is required.

3. A regular transfer requires the department to reestablish the vehicle value (reclassify) to determine the appropriate Vehicle License Fee due. The license fee is based on the purchase price or current market value of the vehicle. A transfer between family members is exempt from reclassification of the vehicle value.

To establish eligibility for the use tax or reclassification exemption, be sure to let the department know that this is a family member transfer.

What Do I Need to Do for a Family Transfer?

The DMV will require:

* The California Certificate of Title properly signed or endorsed on Line 1 by the registered owner(s) shown on the title. You will need to complete the new owner information on the back of the title and sign it.
* A Statement of Facts (REG 256) for use tax and smog exemption, if applicable.
* Transfer fee.
* Odometer disclosure for vehicles less than 10 years old. Refer to Odometer Mileage Reporting.

Additional fees, such as registration fees, may also be due.

I just copied what I found to be important...maybe I missed more info...if u wanna look you can help me by click on that link....so basically this means I don't have to repay the tax right? See 2 and 3

Anyone interperate this for me? I'm not a legal guru but it seems to me I'm good to go...no taxes applicable...besides processing fee...

Thanks
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Old 07-21-2004, 07:22 PM   #21 (permalink)
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If your parents already are talking to a lawyer, you might want to run it past him.
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Old 07-21-2004, 07:35 PM   #22 (permalink)
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Yea i bet they will...they have a lawyer for their businesses....cuz they have to deal with a bunch of workers comp....and like legal matters with the company...so they use him for the home issues too...
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Old 07-21-2004, 10:55 PM   #23 (permalink)
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Well I'll be, it looks like a bonafide loophole wide enough to drive thru. There is no such "family transfer" exemption in NYS. Now it makes sense why your Dad was considering going the "gifting" route you mentioned. I would still check with a legal authority re: the federal gift tax.

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