I am selling my van to my mother-in-law.....?

Question

for $3500. She wants us to make the bill of sale for $1000 and then give a $2500 gift so she can avoid some excise tax. Isn't this illegal?

Would appreciate some info on this.

Answer 1

so what let her pay less taxes on it write $1000 sale price period. people do it everyday, and what's really illegal is the way we're taxed and taxed to death anyway.

Answer 2

Yes, it is illegal. What may happen if you try this, is that the revenue dept for your state will see that the car was sold far below market value, and not only a statement will be needed to say that the car has problems, and therefore isn't worth the full 3500, but a waiver from the revenue will have to be completed. If you don't mind writing the statement(lying)then you can probably pull it off. The whole thing is, how much money is she really going to save? Not that much. I say give her a bill of sale for the correct amount, and let her dig for the tax money, or sign the waiver, but I wouldn't be a part to the fraud. It's exactly this type of problem that drives taxes higher, and makes business deals, more and more complex. Also, as soon as the deal is done, file a Notification of Sale, or Seller's Report of Sale, with the DMV. You will be putting the purchase price on this document, as well. Buyer and seller info must be completed, and this document will protect you from legal action if she fails to transfer title in a timely manner, and the car is involved in a wreck, or illegal activity. As I said, it also has the purchase price listed, if she attempts to file documents stating the purchase price at 1,000, it will trigger a "hold" on the transfer and she will be contacted by revenue. This one form is a must for anyone selling or trading an auto.

Answer 3

DEPENDS ON WHERE YOU LIVE. IN TEXAS, THEY HAVE A COMPUTER BASE THAT LIST ALL THE CARS IN THE STATE AND WHAT THE VALUE OF THESE ARE. YOU ARE THEN CHARGED THE TAXES BASED ON WHAT THE STATE SAYS YOUR VEHICLE IS WORTH, NOT WHAT YOU PAID FOR IT. IMPERSONALLY THINK THIS IS UNFAIR AS I HAVE BOUGHT A VEHICLE FOR A GREAT PRICE THROUGH SOME LENGTHY NEGOTIATIONS ONLY TO BE TAXED AT TWICE THE PRICE.
BUT YES WHAT YOU ARE SAYING IS TECHNICALLY ILLEGAL BUT IT HAPPENS ALL THE TIME AND IT IS JUST PEOPLE TRYING TO BEAT THE GOVERNMENT OUT OF AN UNFAIR TAX SYSTEM.

Answer 4

You sure know how to invite Trouble.Just because she is your mother-in-'LAW,it is not mandatory on your part to bring LAW in to any such dealings with her.I have a gut feeling that in due course of time you are going to loose on your van as well as go short on the money part.Well,who can change the FATE?.Wish you well,knowing that you shall need it.

Answer 5

Anything involving money that sounds suspicious usually is. I wouldn't sell anything to family or a significant other's family. If something happens to the van she's going to want her money back and if you don't have it or you choose not to give it back, things will unravel pretty quickly from there. Good luck.