Neeferea

Do you have to pay taxes of the car sale?

sunysb83

iTrader: (4)

what do you mean? the amount of how much you purchased the car for, than yea if you are the buyer, i think you do when you go register it and get your plates. if its a private sale, you can always make some price up.

2k2kev

Depends on your state...in NH, no. Here you only pay to register it, but then again my state doesn have any sales tax

motocross416

iTrader: (6)

In Michigan, you have to pay taxes on the car each time it is bought, unless it is sold to a family member.

Stephen Max

iTrader: (59)

In general, you pay taxes on capital gains. So if you sold the car at a higher price than you paid for it, then yes, you have to pay taxes on the net gain. I don't think anybody with a Maxima has to worry about that, though. If you sold the car for less than what you paid for it, then no taxes are due.

mzmtg

iTrader: (11)

Could the sale of a car be documented as a capital loss? Then it could be deducted from income up to a certain amount....

2k2kev

No, it's for personal use so it can't be deducted.

If it's not for personal use then it's a business expense and you should already be taking deductions for that.

DanNY

iTrader: (14)

- if you're a business then you should look into leasing or getting a new car. depreciation is fun!

- if you're buying a vehicle used in your own state from a private seller then you pay taxes (if your state charges tax) to your DMV when you register the vehicle. unless it's a "gift" then you don't pay taxes.

- if you buy an used car from a licensed dealer you pay the tax to the dealer. same goes for new of course.

- only the buyer is responsible for the taxes..not seller unless you made $ off it...(don't worry it's not us).

mzmtg

iTrader: (11)

I dont understand why that matters.

Homes and real estate are for personal use, but they are taxed or deducted as capital gains or losses when selling time comes.

2k2kev

When's the last time the law made sense, especially tax law?

A car is "personal use property" ... here's the law:

http://www.fool.com/taxes/2001/taxes010921.htm

Personal use property: property that you use exclusively for personal purposes other than a personal residence or collectibles.

If gain: Taxed as capital gain, either long or short term depending upon your holding period. If long term, you would receive the benefit of a maximum 20% capital gain rate. If short term, your tax rate would be your normal marginal tax rate.

If loss: Non-deductible. There is no deduction for losses on personal use property.

Gen8888

Depends

DanNY

iTrader: (14)

the government ALWAYS get their cut.

DAVE Sz

iTrader: (2)

I paid $65 in taxes for the car. In Illinois they have a TAX table at the DMV and the tax depends on what year the car is. 2002 car was $225, 95 was like $50.

passEMonTHErite

like 1 dollar.

sheidt

Of course, it is possible for the DMV to audit the sales prices and will potentially flag any super-low amounts and go after the person for the taxes that should've been paid.

Here in FL, I had the DMV send me a letter when I put in a price of just under $4K for a 3 year old V6 Accord in a private sale. They wanted proof that I bought it for that amount, since their records showed that it was well below the average sale prices for that car. Fortunately, I bought it from a friend at work and got them to sign a notarized statement saying that was the right amount.

So, if you make up a small number to report to the DMV, be prepared to get the seller to agree to sign something stating that was the actual sales price.