Swapping cars, Pay Taxes?

**thebikedoctor33** · 09-19-2008 06:09 PM

I'm thinking about swapping cars with another az member, and it raised a question. When you trade cars with someone, how does one go about the tax process. Do you pay book value? Or are you giving each other a "gift"?

Anybody know the dealio? Thanks in advance!

**widgget** · 09-19-2008 06:11 PM

stick it to tha man!!! you sell him yours for $100 and he sells you his for $100. real easy.

$100 says this thread gets moved to another forum.

**B6Lovin** · 09-19-2008 06:19 PM

^don't sell it. that'll guarantee that you have to pay taxes. are you friends with anyone at your bank? the best way to do it is to try and have it written off as either an even trade or a gift. (gift is the best) i can't remember how the trade thing works, but if you can find a way to make it a gift then it's tax free title transfer (and it may not cost you anything to transfer either...)

when transferring the title for my car to be ENTIRELY in my name we had it written as a gift from my dad to me (he cosigned since my credit was good enough, but my monthly income was too low to be financed by audi) the lady at the bank was nice and took care of all the papers, and didnt charge us anything. took about 10 mins

**FourRings80** · 09-19-2008 06:24 PM

Unless it stays in the family or is 10 years old, you will have to pay taxes. Well that's how it work in Canada anyway. Or everybody would write it off as a "gift".

**thebikedoctor33** · 09-19-2008 06:30 PM

well i already actually transferred a car via "gift". it was about a year ago. idk if that stays in a system. it was in pa though, so i doubt nj would know about it.

anybody have any for sure info?

**thebikedoctor33** · 09-19-2008 08:41 PM

nothin? no accountants on here? come on...

**EYE4SPEED** · 09-20-2008 07:59 AM

In Mich, DMV told me it has to be a relative to avoid tax...

**LampyB** · 09-20-2008 10:56 AM

colorado has clauses in place that won't let you gift something like this without jumping through serious hoops because they want your tax $. ie. you can't do what Widget says either and sell the car for that cheap.

look into the details of this, but what you might be able to do is just add each other's name onto each of your titles with a Power Of Attorney form. Then once the new titles arrive take a second Power Of Attorney form and both of you will drop your own name from each of your titles. Thus transfer of ownership takes place without the need for taxes to be paid.

i bought out someone's lease and texas tried to tax us as well as colorado, but to make a long story short this is what we did and i only had to pay taxes in CO by just adding my name to his title. then dropping his name.