Posted on 08/04/2011 10:25:56 AM PDT by Wolfie
Edmunds says the true market value is $10,688.
It is a gift and there is not tax to either the giver or recipient since the value is under the gift limit.
http://www.edmunds.com/mercedes-benz/sl-class/1999/?ps=used&sub=convertible&zip=27606
Our state changed how they do things. They used to accept $1 sales for vehicles. Now they set a limit on how low a vehicle can sell for. Don’t recall but think at $100.
The DMV will get their tax.
Exactly! Just like all those people in Oprah’s audience who found out they had to pay the taxes on the new cars she gave them.
Wait till the IRS knocks on his door
Not to mention the Commonwealth of PA and Allegheny County.
They ain’t walking away with 7% sales tax on twenty bucks.
“not” = “no”
sorry...
The IRS cannot do anything about it. He didn’t get the car for nothing, he paid 20 bucks for it. If he sells it for more than 20, then he has to declare the profit, other than that he is within the law, which is why the guy “sold” him the car instead of giving it to him, which would have cost him plenty in taxes.
Gift taxes are the responsibility of the giver.
The state may want to collect sales tax on the actual value.
The IRS (and state) may treat the transfer in excess of payment as imputed income, since they have effectively an employer-employee relationship. The recipient has a good argument that this has nothing to do with compensation for work, or an employment bonus.
Gift and estate taxes are relevant, until coach dies.
The story is a beautiful one. The comments about the taxes is a reflection on our tax system that is 1) confiscatory 2) arbitrary/ open to interpretation 3) unfair in any sense of the word. It is amazing that generosity would be taxed. But I believe this is no less different than the estate tax where the generosity to relatives is taxed. Render unto Ceaser...
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