Anyone with experience trading cars between 2 people in CA ?

[Deschodt]

Say I want to trade my car for another guy's, and vice versa. We'd swap my early 911 for his late 356.

I thought no money changing hands would lead to not much tax if any, ha! Seems CA wants Fair Market Value regardless, but others report doing it as a gift transaction...

Anyone done that before ? Seems crazy to pay $$$ tax on a no money transaction! Can't be right...
If that were so I guess the only benefit would be IRS related, since you did not get $ in a sale.

[drkshdw]

Call the DMV and ask.

I know here in Nebraska, you pay tax on the value of the car, not what it sold for. Even on even trades where no money changes hands. In the states eyes, trades are the same as selling your car for XX.XX and then buying another one at the same XX.XX price so tax has to be paid.

[speeder]

Sell your cars to each other for $1k and do the transfer. Either that or pay tax of $10k each to DMV, (gifts are taxed @ market value). Give each other $1k so you are not lying. No one at the DMV knows wtf a 1963 Porsche is worth, trust me.

This is not rocket science.

[MysticLlama]

Not CA specific, but WA has a similar sales tax issue.

What people will do is arrange to trade in both cars to a dealer and then the other party buys them back at that price, the trade-in credits the value of sales tax back and you only pay tax on the amount over that.

So up here, people will organize the trade with a friendly dealer and give them $500-1000 or so for the paperwork trouble depending on other factors. Goes pretty quick.

[stomachmonkey]

Originally Posted by speeder

Sell your cars to each other for $1k and do the transfer. Either that or pay tax of $10k each to DMV, (gifts are taxed @ market value). Give each other $1k so you are not lying. No one at the DMV knows wtf a 1963 Porsche is worth, trust me.

This is not rocket science.

They will have some value in the database, how accurate the value is is the question but it's almost certain to be north of $1k.

If it's within a +/- range of $1k then no questions.

If it's multiples of $1k at the low end they can and most likely will charge tax on that number.

Most of that really hinges on how apathetic the Civil Servant is.

I've run into both.

[speeder]

Originally Posted by MysticLlama

Not CA specific, but WA has a similar sales tax issue.

What people will do is arrange to trade in both cars to a dealer and then the other party buys them back at that price, the trade-in credits the value of sales tax back and you only pay tax on the amount over that.

So up here, people will organize the trade with a friendly dealer and give them $500-1000 or so for the paperwork trouble depending on other factors. Goes pretty quick.

California doesn't have that "pay tax on the difference" thing. Trade in a $90k last year Porsche on a new $100k one and pay tax on $100k.

[speeder]

Originally Posted by stomachmonkey

They will have some value in the database, how accurate the value is is the question but it's almost certain to be north of $1k.

If it's within a +/- range of $1k then no questions.

If it's multiples of $1k at the low end they can and most likely will charge tax on that number.

Most of that really hinges on how apathetic the Civil Servant is.

I've run into both.

What you are suggesting requires some person at the DMV in Sacramento who is inputting hundreds of transactions an hour to GAF or flag this one. Doesn't usually happen in the real world. Also, there is no law against selling your old car for $1k. Just say that it needed a lot of work if it comes up. It won't.

[craigster59]

Usually a low bill of sale with the phrase "as is condition" will get it past DMV. Just tell them it's a non running car that you are going to be working on, so no reason to register "inop" for now.

[MysticLlama]

Originally Posted by speeder

California doesn't have that "pay tax on the difference" thing. Trade in a $90k last year Porsche on a new $100k one and pay tax on $100k.

Ouch. Well, there goes that.

[stomachmonkey]

Originally Posted by speeder

What you are suggesting requires some person at the DMV in Sacramento who is inputting hundreds of transactions an hour to GAF or flag this one. Doesn't usually happen in the real world. Also, there is no law against selling your old car for $1k. Just say that it needed a lot of work if it comes up. It won't.

In NY it comes up automatically during registration, no one does anything, gets flagged all on its own.

Been through it several times.

[speeder]

Originally Posted by craigster59

Usually a low bill of sale with the phrase "as is condition" will get it past DMV. Just tell them it's a non running car that you are going to be working on, so no reason to register "inop" for now.

The CA. DMV does not even accept bills of sale, just signed titles and their boilerplate form for transferring vehicles. I do this a lot.

[onewhippedpuppy]

Originally Posted by speeder

What you are suggesting requires some person at the DMV in Sacramento who is inputting hundreds of transactions an hour to GAF or flag this one. Doesn't usually happen in the real world. Also, there is no law against selling your old car for $1k. Just say that it needed a lot of work if it comes up. It won't.

Bingo. You can sell your car for whatever the hell you want. Not to mention that a 50+ year old car can be anywhere between a six figure masterpiece and a pile of rusty metal. It’s not exactly a 2017 F150 that can be looked up on KBB.

[SoCal911T]

Originally Posted by speeder

What you are suggesting requires some person at the DMV in Sacramento who is inputting hundreds of transactions an hour to GAF or flag this one. Doesn't usually happen in the real world. Also, there is no law against selling your old car for $1k. Just say that it needed a lot of work if it comes up. It won't.

This^
BTDT several times. The average DMV employee sees any car more than 10-15 years old as just "some old car". I bought my e28 M5 for $500 and it didn't raise any eyebrows.

[Neilk]

Originally Posted by SoCal911T

This^
BTDT several times. The average DMV employee sees any car more than 10-15 years old as just "some old car". I bought my e28 M5 for $500 and it didn't raise any eyebrows.

I’ll give you 1,000 for it and you can make a 100 percent profit!