Gift Tax Giddiness

Today TaxMama hears from Thomas in the TaxQuips Forum who is in a bind. “Thomas bought a used car from a rental agency, paying by wire transfer, then suddenly got called out of town before he could pick it up. They cannot wait the one, itsy-bitsy, extra day for him to return, so his girlfriend must receive the car on his behalf. Title must be in the name of whoever receives it. To get it re-titled from her, will he face gift tax issues?” (Read the details here.)

 

Dear Thomas,

You’ve already paid for the car, right? She’s just taking possession of it in your absence. It’s not a gift.

Just write up a document instructing her to take possession in both your names, in order to complete the transaction, as your agent. She can take title as “Thomas OR [girlfriend]”. You can remove her from title later.

It’s not gift tax you need to worry about. It’s your state sales tax. When you remove her from title, will it trigger a sales tax? I should not think so. But it might be worth looking into.

Adding you to title? That might trigger a sales tax.  

(Incidentally, I really hope Thomas doesn’t get any surprises like this one – Man Buys Used Minivan From Thrifty Packed With $500K In Cocaine: http://bit.ly/u3sgod – WOW!)

And remember, you can find answers to all kinds of questions about gift taxes, and other tax issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!] 

Please post all Comments and Replies in the new TaxQuips Forum .

Leave a Reply