Anyone ever trade cars with another person in California?
Thread Starter
Registered User
iTrader: (8)
Joined: Oct 2008
Posts: 274
Likes: 0
From: San Francisco
Anyone ever trade cars with another person in California?
Anyone know how to do the use taxes correctly when there is a trade among two private owners? The car I'm looking to acquire is worth more than my own, but we're doing a straight trade of the vehicles. For example, mine could be worth $15000 while the other party's is worth $25000.
I found this on a CA government site concerning taxes.. but it doesn't really help me since there is an obvious difference in "worth" of the trade.
I still think it's BS that a vehicle is being taxed twice.. but apparently "gifting" isn't a legal option as we aren't related and a trade is considered as two separate transactions? Just trying to keep it legal but not also not pay more than I need to.
I found this on a CA government site concerning taxes.. but it doesn't really help me since there is an obvious difference in "worth" of the trade.
Are transfer by barter, exchange, and trade-in subject to tax?
Yes, the total value or consideration given to acquire tangible personal property is included in the amount subject to tax. In general, consideration includes cash, assumption of any loan, cancellation of a debt, value of property traded or exchanged, value of services bartered, and any other payment, valued in dollars, given to purchase the property.
For example, if you purchased a 45-foot sail boat with a selling price of $200,000 and you gave the seller $25,000 cash, assumed his $100,000 mortgage, and also traded your 36-foot motorhome worth $75,000, you would owe tax on the entire $200,000 purchase price (that is, the total value or consideration given to acquire the boat). No deduction can be taken for tax previously paid when you bought the motorhome.
Yes, the total value or consideration given to acquire tangible personal property is included in the amount subject to tax. In general, consideration includes cash, assumption of any loan, cancellation of a debt, value of property traded or exchanged, value of services bartered, and any other payment, valued in dollars, given to purchase the property.
For example, if you purchased a 45-foot sail boat with a selling price of $200,000 and you gave the seller $25,000 cash, assumed his $100,000 mortgage, and also traded your 36-foot motorhome worth $75,000, you would owe tax on the entire $200,000 purchase price (that is, the total value or consideration given to acquire the boat). No deduction can be taken for tax previously paid when you bought the motorhome.
Registered User
Joined: Mar 2011
Posts: 1,168
Likes: 0
From: Citrus Heights, Ca
same. when i sold my cb400, i just left the amount blank and told him he could either put the full amount on there and pay taxes or write $1 and deal with it that way lol. screw CA and their BS taxes.
Trending Topics
Thread Starter
Registered User
iTrader: (8)
Joined: Oct 2008
Posts: 274
Likes: 0
From: San Francisco
the rx7 was an 87 and the datsun a 75, I have a friend that traded a ridiculous S14 for an E46 M3 and they both just put $500 and still no hassle... Im guessing its really going to come down to who you get at the DMV and what kind of day they are having...
New Member
Joined: Dec 2003
Posts: 573
Likes: 5
From: Oakland
You don't have to be family to gift something, VLF will be based on market value and you don't have to pay use tax.
Don't say anything about trading.
"Upon change of ownership, the department reestablishes the vehicle value and determines the appropriate Vehicle License Fee based on the purchase price or current market value of the vehicle. Gifts are not exempt from the reclassification and are reclassified based on the current market value of the vehicle"
"Normally, use tax is due at the time of any regular transfer. However, because your vehicle was acquired as a gift, you are not charged use tax. To apply for this exemption, you must complete and submit the Statement of Facts (REG 256) with your application."
Don't say anything about trading.
"Upon change of ownership, the department reestablishes the vehicle value and determines the appropriate Vehicle License Fee based on the purchase price or current market value of the vehicle. Gifts are not exempt from the reclassification and are reclassified based on the current market value of the vehicle"
"Normally, use tax is due at the time of any regular transfer. However, because your vehicle was acquired as a gift, you are not charged use tax. To apply for this exemption, you must complete and submit the Statement of Facts (REG 256) with your application."
Thread
Thread Starter
Forum
Replies
Last Post
