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So are you saying it is better to go with $100 bill of sale vs a gift?
In my experience, yes, much less headaches.
I buy a lot of cars, boats and bikes from private sellers and many of them ask me if I want them to put "gift" on the title. I tell them no, Id rather them put 100 or even a few hundred to avoid the hassles I've had in the past with gift titles, EVEN WHEN IT WAS A LEGIT FAMILY GIFT with matching last names. It probably depends on the state.
I buy a lot of cars, boats and bikes from private sellers and many of them ask me if I want them to put "gift" on the title. I tell them no, Id rather them put 100 or even a few hundred to avoid the hassles I've had in the past with gift titles, EVEN WHEN IT WAS A LEGIT FAMILY GIFT with matching last names. It probably depends on the state.
Thing is I'm not circumventing anything. There will be no money transferred in this transaction
Not implying you are, IShootNikon . . . however, I bet you may be in the minority. That's exactly why both of you sitting down with a DMV Representative may be your best bet.
I guess I'm lucky to live in a state where there is no State Sales Tax on Private Party Sales.
Not implying you are, IShootNikon . . . however, I bet you may be in the minority. That's exactly why both of you sitting down with a DMV Representative may be your best bet.
I guess I'm lucky to live in a state where there is no State Sales Tax on Private Party Sales.
May do that. But of course since it is a transfer we will need insurance from buyer and emissions report
We "sold" a used car worth $2000+ to a struggling, good friend of ours for $50. I didn't want to just give her the car and I think she appreciated contributing for it and it did make the transfer of ownership at the DMV much easier. I think it's a great thing to do for those of us who can, to an otherwise stable, hard working friend in our lives who is struggling financially and where dependable transportation can help support an upwards trajectory.
Having done this in Colorado with a family member, I've seen from experience that the easiest way to handle the transaction is to write up a bill of sale for a realistic nominal amount. It's a lot easier to go through the system at a minimal cost than to try to pass an ownership transfer off that looks like somebody is trying to avoid paying sales tax.
A "gift" transfer to a non-family member at $0 will get undue attention from a county title clerk, especially when the sales price is much less than even the scrap value of the vehicle at a salvage yard. The new owner will likely be looking at a lot of extra scrutiny/valuation and additional paperwork hassles from a system motivated to collect as much sales tax as possible on the title transfer. The annual ownership tax component of the license fee will still be based upon the weight and depreciated value per the Colorado schedules.
As suggested above, it's a lot easier to write up a bill of sale for a few hundred dollars, condition "as is, where is", and support that very low valuation with the high mileage odometer statement as part of the paperwork/title application. At the local sales tax rate, it will be a minimal amount of money; even a $300 sale @ 7% is only $21. If your intent is to gift the car to this person, give them the money so they can pay the tab at the counter. The authorities will still accept cash for the transaction along with the title fee.
No need for both of you to go to the county offices. The buyer can take care of the transaction in a normal manner this way.
Should anybody ask, you agreed to finance the buyer. Perhaps you took a nominal $1 down payment and a verbal promise to pay the balance in a reasonable time frame by the buyer when they had a job and could afford to pay the obligation. In due course, maybe they didn't have the financial ability to pay and you've just written off the amount as a lesson learned in why you don't sign a title over to somebody without filing a UCC promissory note on a vehicle sale? They didn't pay up, you didn't collect any payments, and it's such a nominal amount of money that it isn't worth your time to pursue in small claims court, right?
Having done this in Colorado with a family member, I've seen from experience that the easiest way to handle the transaction is to write up a bill of sale for a realistic nominal amount. It's a lot easier to go through the system at a minimal cost than to try to pass an ownership transfer off that looks like somebody is trying to avoid paying sales tax.
A "gift" transfer to a non-family member at $0 will get undue attention from a county title clerk, especially when the sales price is much less than even the scrap value of the vehicle at a salvage yard. The new owner will likely be looking at a lot of extra scrutiny/valuation and additional paperwork hassles from a system motivated to collect as much sales tax as possible on the title transfer. The annual ownership tax component of the license fee will still be based upon the weight and depreciated value per the Colorado schedules.
As suggested above, it's a lot easier to write up a bill of sale for a few hundred dollars, condition "as is, where is", and support that very low valuation with the high mileage odometer statement as part of the paperwork/title application. At the local sales tax rate, it will be a minimal amount of money; even a $300 sale @ 7% is only $21. If your intent is to gift the car to this person, give them the money so they can pay the tab at the counter. The authorities will still accept cash for the transaction along with the title fee.
No need for both of you to go to the county offices. The buyer can take care of the transaction in a normal manner this way.
Should anybody ask, you agreed to finance the buyer. Perhaps you took a nominal $1 down payment and a verbal promise to pay the balance in a reasonable time frame by the buyer when they had a job and could afford to pay the obligation. In due course, maybe they didn't have the financial ability to pay and you've just written off the amount as a lesson learned in why you don't sign a title over to somebody without filing a UCC promissory note on a vehicle sale? They didn't pay up, you didn't collect any payments, and it's such a nominal amount of money that it isn't worth your time to pursue in small claims court, right?
Sound advice. $300 shouldn't raise any eyebrows since it is a beater
It's much better to sell for a nominal amount, I agree. You can give the money to the other party as well, subject to the maximum allowable before you have to pay gift taxes, not an issue in this case. I would not write that it is not running on the bill of sale, but that it is an "as is" and cosmetic condition is fair, since there is wear to the seats, etc., and that the vehicle will likely need some of the seals and belts replaced, so you cannot fleece your friend by charging them $1k book value for a vehicle that does not meet that standard for the marketplace, if you are asked about the condition of the vehicle at the DMV. There are fewer headaches than gifting with a $0 transfer amount, since that is a means some people do use to avoid taxes, which makes it much harder for legitimate people who are actually giving the vehicle as a gift.
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