title taxation (Rule: sales, leasing, how much)

[bianca324]

I was recently given a car that I am going to transfer over to my name at the sylvia romo tax place to register, but the person who gave me the car stated I will have to pay taxes and stated if they write a reciept that they sold it to me for 5.00 it would be that I only have to pay taxes on the 5.00, is that how it works? I have never went through the process of transferring a title

[bspray]

You won't pay tax on $5, you will pay tax on the estimated value of the car, even if the car was a gift. Too many people were trying to get out of paying tax on the purchase of used vehicles by saying it was a gift so they made a law saying you pay tax on the estimated value of the vehicle regardless of what you paid for it (or didn't pay for it).

[elnina]

It depends who sold you the car:
Eligible Gift Transfers –
To qualify to be taxed as a gift ($10), a vehicle must be received from the following eligible parties:
• spouse (separate property only–vehicles held as community property are not subject to the tax);
• parent or stepparent;
• father/mother-in-law or son/daughter-in-law;
• grandparent/grandparent-in-law or grandchild/grandchild-in-law;
• child or stepchild;
• sibling/brother-in-law/sister-in-law;
• guardian;
• decedent’s estate (inherited); or
• a nonprofit service organization qualifying under Section 501(c)(3), IRC (gift tax applies when the entity is either the donor or recipient).
A motor vehicle received outside of Texas from an eligible donor may also qualify as a gift when brought into Texas.
All other motor vehicle transfers, including those made without payment of consideration, are defined as sales and may be subject to Standard Presumptive Value (SPV) procedures.
See Tax Code Sec. 152.0412, Standard Presumptive
Value; Use By TaxAssessor-Collector and Rule 3.79, Standard Presumptive Valu
http://www.window.state.tx.us/taxinf...rms/14-317.pdf

[pobre]

Standard Presumptive Value can also kick in when the sales price is lower than the presumptive value from a dealership or other company. I purchased a car going off lease from the leasing company that leased it to my neighbor. They sell them off below market value. I had to pay tax on a presumptive value of around 12K, even though the purchase price was 8K. And this was NOT a private party sale.

[Hedgehog_Mom]

If the car is a gift from an eligible party (as listed in post #3), the person giving the car to you has to have a form notarized saying they gave you the car. It's easiest just to take them with you to the tax assessor's office because they can notarize the form.

[bianca324]

ok thanks, it was given to me from my mom since usaa totally screwed me over on my car claiming its uninsurable after having front end damage to the side so I was in a bind and she is giving me a toyota solara but if its easier to claim as a gift she will go with me, but I should still plan on paying some type of tax right?

[KM1174]

Originally Posted by Hedgehog_Mom

If the car is a gift from an eligible party (as listed in post #3), the person giving the car to you has to have a form notarized saying they gave you the car. It's easiest just to take them with you to the tax assessor's office because they can notarize the form.

actually, they dont. my csb:

my wife and i were given a car from her mother. title was lost, had to get a bonded title. no worries right? mostly. they did indeed tax us on the value of the car, despite us paying zero for it. their logic? 'we dont know if its stolen and without the title we have to charge you'.

this was a 'manager' at the downtown branch.

he no longer works there and his boss explained policy and that if we had the title and my mother in law came down with us, we would have paid a gift tax and nothing else.

subsequently, you can get a title transfer from a 3rd party title business, claim a gift, and they are a lot more lax than the downtown branch.

[Hedgehog_Mom]

When my mom gave me her old car, I went to get the title transferred without her and they said she had to come also or have the form notarized. So we just went to the tax office together.

I do think title services are easier to do business with and more convenient but they still have to have the right paperwork to submit to the state.

When I titled the car my mom gave me, I didn't have to pay tax, but I had to pay for the title and registration. I can't remember how much it was, I've paid for a lot of things since then

[bianca324]

so the downtown branch would be better go go to rather than the office on guilbuea? Thanks for all the info and advice.

[Hedgehog_Mom]

The office on Gilbeau should be fine too.