I wanna give away my car to my relative. it's value is over 12k. do we need to pay tax ? if so can we avoid it
2007-10-08 04:43:08 · 2 answers · asked by emuleiii 1 in Business & Finance ➔ Taxes ➔ United States
You'll need to file a gift tax return, although you probably won't owe any tax unless you've already used up your lifetime exclusion of $1 million.
The person who receives the car might have to pay sales tax when they register it. That depends on state law and your relationship.
2007-10-08 04:52:40 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
If it is worth less than $24,000, you could avoid it (the gift tax return) by essentially gifting $12,000 worth of it in 2007, and the rest in 2008.
For example, if it is worth $20,000, you could sell it to him for $8,000 (thus effectively making a $12,000 gift). Then in January of 2008, give him $8,000.
2007-10-08 12:58:12 · answer #2 · answered by r_kav 4 · 2⤊ 0⤋