Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
6 posts • Page 1 of 1
I want to give my adult son ( not living with me) a car that is worth about $10k. It was my husband’s car before he passed away, and I have no need for it. My son and I both live in PA. Would he or I have to pay state or federal tax on the transfer? I recall reading about selling a car for $1, but can’t remember why that might be an option.
- Posts: 13051
- Joined: Tue Dec 31, 2013 7:05 am
- Location: 26 miles, 385 yards west of Copley Square
Check if PA has a similar form to MA, where a transfer within a family (that's defined) results in no sales tax. Then the new owner titles and registers the car. With our form, they don't want any amount to be listed for a sale price. The first time I did this, we bought a car from my father in law. The registry crossed out the price we paid and wrote in zero. They only care for sales tax reasons and there's no sales tax, thus zero.
Bogle: Smart Beta is stupid
Thanks. I was able to find an Affidavit of Gift form that I think might cover it. It doesn’t specifically say it eliminates a tax, but it does ask if the transferee is related to the transferor and it is a DOT form, so I think it might be the same idea as in your state.
We just transferred a car to our daughter in PA. There is no sales tax with the gift affidavit for direct family members. There are several other fees you have pay. It think it was about $170 but included registration for the coming year.
Are you gifting more than $15,000 to your son this calendar year?
If not, then no need for Form 709, as I understand it.
...You must file Form 709 whenever the total value of all the gifts you make to a single person within the same calendar year exceeds $15,000 as of 2020. This $15,000 threshold is referred to as the annual exclusion, and it's up from $14,000 in 2017...
"What Is IRS Form 709? IRS Form 709 Explained" - thebalance.com
"Ritter, Tod und Teufel"