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Old 12-05-2014, 05:23 PM   #1
flip326
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"Gift Tax" on a vehicle with a lien

If I were to buy my Dads car, but he still has a lien on it, am I required to pay presumptive resale tax on it?

I'd basically be refinancing the car under my name, but wanted to know about any taxes I'd pay.
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Old 12-05-2014, 05:29 PM   #2
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can it be a "gift" if he doesn't own it? I doubt it.

http://window.state.tx.us/taxinfo/mt...chase_spv.html
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Old 12-05-2014, 05:31 PM   #3
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i think your out of luck.

http://www.window.state.tx.us/taxinf...rms/14-317.pdf
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Old 12-05-2014, 05:42 PM   #4
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Makes sense..I guess its not as easy as "here you go son"...

I figured since he paid the origonal tax on the car, and im simply refi to take over payments, I wouodnt have to pay taxes again on the same car....uncle sam is a sometimes.
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Old 12-05-2014, 05:47 PM   #5
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Originally Posted by flip326 View Post
Makes sense..I guess its not as easy as "here you go son"...

I figured since he paid the origonal tax on the car, and im simply refi to take over payments, I wouodnt have to pay taxes again on the same car....uncle sam is a sometimes.
tell me about.... walked into transfer tags/title on a new ride a couple of weeks ago. paid about 6400 for it....SPV was 3800. So, b/c the seller filled in the sales portion on the title form they tried to tax me an additional 6.25% on 2600 bucks (over 80% SPV). Took my form, previous title, walked out, scratched a line through sales price and went back in the next day....saved myself $162. If you're not gonna cut me a break and just assume 80% of SPV, why should tell you that I paid over your presumption? Especially when the tax has already been paid at least once. Sales tax on used vehicles me off.
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Old 12-05-2014, 07:06 PM   #6
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Danny, from the link you had earlier....I'm really tired, and its been a loooong day at work, but if Im reading this correctly, assuming his debt could qualify as a gift?

What is a gift?
A gift is the transfer of a motor vehicle between eligible parties for no consideration. Consideration includes anything given as payment
such as cash, the assumption of a lien or other debt, payment for providing services or labor, or an exchange of real or tangible personal
property.
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Old 12-05-2014, 09:48 PM   #7
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Old 12-05-2014, 09:58 PM   #8
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Old 12-05-2014, 09:58 PM   #9
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Old 12-05-2014, 10:34 PM   #10
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Legally, for the car to be yours i would think youd have to get the lien transferred to your name as the lender. In which case sales tax probably applies to the market value or outstanding loan amount, regardless if you paid your dad. Its like you are taking on a new loan to pay him for him to payoff his debt.

Do nothing to transfer lien, title goes to dad after payoff and gift taxes apply when he gives title to you. Probably the better option bc tax on market value will be lower by then and you pay later. Downside is not sure if you can register in your name until then..
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Old 12-05-2014, 10:40 PM   #11
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Legally, for the car to be yours i would think youd have to get the lien transferred to your name as the lender. In which case sales tax probably applies to the market value or outstanding loan amount, regardless if you paid your dad. Its like you are taking on a new loan to pay him for him to payoff his debt.

Do nothing to transfer lien, title goes to dad after payoff and gift taxes apply when he gives title to you. Probably the better option bc tax on market value will be lower by then and you pay later. Downside is not sure if you can register in your name until then..
this, just set up the account to withdraw from your debit card. How much car are we talking about here. Might be worth it just to pay the taxes and be done with it.
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Old 12-06-2014, 04:22 PM   #12
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this, just set up the account to withdraw from your debit card. How much car are we talking about here. Might be worth it just to pay the taxes and be done with it.
$25k for a 2012 lexus es350.

I wont have the cash on hand to buy outright since I'm closing on a new house December 29th and putting substantial amount as down payment.
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