anyone ever gift of sell a car? are there tax implications for either?
I bought and insured a car in my name for my adult daughter. I am in NY. Car has NY plates
during COVID she moved to MD, permanently. has a MD license.
I am hoping I can gift her the car. she can register it in MD, get MD plates and insure it in her own name.
Can I just sign over the title? do I need a bill of sale? can she turn in the NY plates in MD or she would just send them to me to turn in, and we may just be paying double insurance until I turn in plates and take care off my record.
am I missing anything?
thanks in advance. many years ago I remember giving my dad a token fee to avoid taxes on a gifted car, but the laws may have changed.
My experience relates to Minnesota. When a car is transferred between family members (e.g., child-parent or sibling-sibling) there is no sales tax or something like that. You just file the paperwork to get it registered in the new owner’s name. This was a MN-MN exchange, too, so, ymwv.
I think you’d have to fill out both the title and the NY Bill of Sale and specify it’s a gift (Section 6, page 2 of the Bill of Sale according to the link below). MD has a document strictly for gifting vehicles to relatives on their DMV’s website, but it’s only applicable if it’s MD-to-MD transfer.
Is that from the “stay on the sunny side” song with the knock knock jokes?
Esther… Esther who… Esther bunny
Nutter… nutter Esther bunny
Stella… Stella nutter Esther bunny
Cargo… cargo beep beep run over all the Esther bunnies
Boo… boo who… aw don’t cry Esther bunnies be back next year
And you can gift up to 10m(?, used to be 5m) to a person in your life. So unless you’re super rich, you can gift everything you own to someone without tax implications. You just have to report anything over $15000 so the IRS can keep track of how much you’ve gifted.
Might consider potential tax implications for her to register the car in another state.
I know that in IL, “How much did you pay for the vehicle?” is asked to determine the Use Tax for registration. If the vehicle is gifted, then a fair price is determined (by the state, IIRC) and used to determine the Use Tax.
Colorado, on the other hand, doesn’t do this (IIRC).
Not sure how other states might handle this, though.
I was looking at the Maryland application, and if the vehicle is less than 7 years old, you’ll need a notarized bill of sale from out-of-state in addition to the NY title (even if it’s older, I would still recommend it, especially if the DMV is nitpicky with how the back of the title is filled out).
Maryland does have an excise tax of 6% - but not sure if she would have to pay it.