Do I pay taxes on car parents gave me if I trade it in?
My parents have a 2006 Lincoln LS they are wanting to sell and we are looking to buy a car. If my parents give me the car or transfer title to me and I then trade the car in will I have to pay taxes on the amount the dealership gives me for the car?
What we are looking to do is trade in one of our cars and trade in the parents car. After have the dealership write us a check for the amount of the trade ins we would finance the entire price of the car purchased. My reasoning is in Florida you only pay taxes on the difference of the trade in so if I can use the Lincoln it will save us additional cost of paying taxes.
I would then write the parents a check for the Lincoln and use the cash we got from our car to pay off credit cards.
Is this Legal? What are the tax consequences?
Thank you in advance!
- troLv 79 years agoFavourite answer
usually the transfer of autos between family members doesn't incur sales tax when you register the car you received, you need to check you particular state on that matter
but once you have registered your gift car and trade it in for a newer one, of course you will pay sales tax on the purchase
- Calvin CLv 79 years ago
What a stupid complicated mess you are making out of a car. The car is worth over 10K so your parents would have to file a gift tax return, there are fees for transfer of ownership including in most states sales taxes. Just have your parents go to the dealership with you and trade their car along with yours for the new car and then deal with the money to your parents outside of the transaction
- terceroLv 44 years ago
it may stay away from on your coverage by using evaluate costs at DEALSQUOTE.info- RE Do moms and dads truly assume their children in highschool to pay for his or her very own vehicles? Its enraging when I listen my moms and dads/moms and dads commonly tell their childrens, who've their licenses to "pay for a automobile your self". no longer even a chop up? A mortgage? those childrens are nevertheless in highschool! Even after highschool in college, I do purely not see how you may pay for even a "cheap" used automobile themselves except they dedicate their life and save each and every penny for the damn automobile. those that age oftentimes earn close to to minimum salary, and in the adventure that they spend all their time operating particularly of reading, it really is all their ever going to make. Ex) my pal earns 9.25 hourly at a food market (he's worked there for a at the same time as so its no longer correct minimum salary), and works 40 hours per week. he's continuously at artwork. on the end of the week, his assessments are nicely worth about 338 after taxes. A crappy used automobile is likely about 5000? i'm no longer totally certain. someone that age may ought to artwork 40 hours per week for truly a lengthy time period. seeing that they are childrens, that could fairly a lot go away them no time for reading/doing homework and a social life commonly. do not moms and dads choose their little ones to finish nicely academically to boot? except for economic themes of their very own, why doesn't a determine with a respectable quantity of money atleast comply with help their to blame youngster pay for a used or a lot cheap automobile? i'm no longer suggesting sparkling BMWs or mercades, yet why compared to an 06/07 used toyota or honda in sturdy condition? Why no longer comply with help pay for.0.5 or a smaller fraction of it? and do not they get ill of their childrens continuously utilizing their vehicles? What do you imagine?
- rtfmLv 79 years ago
You don't pay tax on the money you get from selling something you already own, unless you make a profit on it.