Hi. I live in CA and am a finalist in a drawing for a free 2 year lease on a car valued at $25,000. I'd like to win but am worried because I will still have to pay any taxes, registration, licenses, insurance etc . . .
I am estimating the registration would be 250-300, insurance an additional 100 a month, but what would my taxes be? Would I have to pay taxes if the lease is "free"?
2007-10-10 05:49:30 · 8 answers · asked by Emma S 2 in Cars & Transportation ➔ Insurance & Registration
Yes, You will have to pay tax on the depreciation value of the car and don't forget to add destination fee, around $400.
The sale tax is based on where you live but not from where you bought the car (CA).
Just to give you an idea: (Approximate)
25,000 x .65% (residual value) = 16,250
25,000 - 16,250 = 8750 depreciated after 2 years least.
8,750 x .0825 = 721.87 Tax.
2007-10-10 07:07:16 · answer #1 · answered by <OiO> 4 · 0⤊ 1⤋
Leases are subject to sales in a slightly different way than purchased vehicles. When you purchase a vehicle you pay sales tax on the value of the vehicle up front. With a lease, you pay sales tax based on the amount of the lease payment. Even though you would be getting the vehicle for "free", you would still have to pay sales tax based on what the monthly lease payment would be (don't know your exact tax rate, but it should be less than $40 a month).
2007-10-10 12:56:47 · answer #2 · answered by remowlms 7 · 0⤊ 2⤋
That 250-300 should include taxes. Registration is only about 30 bucks. That's when you get your license every year.
2007-10-10 13:00:53 · answer #3 · answered by Mr.October 2 · 0⤊ 1⤋
Truly do not see what you are getting for free
please read very carefully never believe any money is for free if it passes through your hands and if you signed that contract
surely you have to pay tax's all you are getting is the privilege to buy from the company and that should be your privilege
not theirs,
nothing is ever for free always there is a gimmick behind
the tricks
always read twice before you sign contracts
it is so easy to pull your name out of random..
its junk mail it usually slips through the bulk
no charge to them you will pay more then the price it is worth
READ AGAIN slowly..
2007-10-10 13:41:23 · answer #4 · answered by Anonymous · 0⤊ 2⤋
You must include the value of the lease in your state and federal taxes as income. You may also be able to prorate it over the an average lease period. Consult with a CPA.
2007-10-10 12:53:53 · answer #5 · answered by Anonymous · 0⤊ 2⤋
If you do, it will be based on fair market value. Check with your tax consultant to be sure.
2007-10-10 13:02:42 · answer #6 · answered by oklatom 7 · 0⤊ 2⤋
Check with your tax consultant to be sure.
2007-10-10 13:11:50 · answer #7 · answered by Anonymous · 0⤊ 2⤋
consult with a CPA
also you can talk to the people giving away the prize.
2007-10-10 12:57:40 · answer #8 · answered by Tivogal 6 · 0⤊ 3⤋