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Under reporting sales price when selling your car.

Joined
9 September 2000
Messages
194
Location
Arcadia, Calif., USA
I'm currently trying to sell my '00 NSX-T so I can consider getting a '02 or '03 NSX. The new changes for '02 have grown on me and I started to like the new headlight design. Anyway, I have a potential buyer who wants me to under report the actual sales price of the car so he can save money on the sales tax. I have no gain in doing this and I was wondering if there could be any consequences on my part should I under report the sales price, within reason of course. Thanks for any replies.

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'00 NSX-T, silverstone/blk, #252
 
The question is under report by how much? If the car you're selling is significantly lower than the market value, DMV will require you (the seller) to write a letter to state that why the selling price is significantly below the market value.

Please also do not use the excuse that the buyer is your relative or friend, as gift tax may involve.

My suggestion is: be honest and report the full amount.
 
I agree with bkwan. Especially since you chose to ask this question in a PUBLIC forum!! Essential this conversation is now tracable and public knowledge.

Tell the buyer sorry, you are not interested in fraud.

JMO,
LarryB
 
Make the seller aware that DMV will question a cheap purchase price. You may, however want to leave the purchase price blank on the pink slip. When the buyer takes it to DMV they'll question him as to the purchase price.
 
I am not sure if this applies in California, but for private transactions, my DMV requires a notarized bill of sale for all vehicles sold within the past seven years.
 
You also might want to check on the sales tax laws in the buyer's state. For example, in Illinois, the tax on a purchase from a private individual is a sliding scale based on the value of the vehicle, but it's the same for any amount over $30,000. Which means that the sales tax on a used car purchased for $31,000 is the same as one purchased for $61,000.
 
A little free legal advice:

Intentionally misrepresenting the sales price of a vehicle in a filing with a governmental authority such as the DMV is tax fraud and may result in criminal and civil penalties being assessed against both the buyer and seller.

If the buyer can afford the car, he can afford the tax. Don't waste your future down payment monies on a criminal defense attorney for yourself just to help out the buyer.

Bob
 
If you live in a state without property tax and the buyer does not - you can have the bill of sale setup after Jan 1 so that he wont have to pay the property taxes till the following year and there would be no reprocussions for you - other then enjoying your NSX for a couple more months and watching the 02' prices go down some more.

[This message has been edited by matteni (edited 22 October 2002).]
 
Here in Canada the DMV will charge sales tax on the higher amt. If the sales invoice is for $45,000 but the market value (black book value) is $55,000 you'll get charged tax according to the market value. But if the sales invoice is higher than the market value they'll charge you tax on invoice amt. Whatever puts more money in the gov'ts pocket is what they'll nail you on.
 
Originally posted by NoClgDeg:
You can sell the vehicle for what ever you want. The DMV will not question the amount.

The DMV cannot tell you how much to sell the car for. However, they can tax you on the full market value if you claim that you sell it for substantially less.

Basically, there are (at least) two people that you can get into a lot of trouble with for telling them lies. One is your insurance company, and one is the government. NOT a good idea.

[This message has been edited by nsxtasy (edited 22 October 2002).]
 
I believe that honesty in all business dealings both public and private should be honest and above reproach.you know the right thing do do in this matter.retain your integrity,when its gone or forseen as gone so are your future business dealings whatever they might be. just my 02 cents
david
 
Thanks for all the replies. Needless to say, I'll be reporting the actual sales price of the car. I have nothing to gain and if it costs me the sale of my car to this particular buyer so be it.

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'00 NSX-T, silverstone/blk, #252
 
Let's put a twist in it. What if the fair market value or book value for a stock car is $30k, but you pay $40k because it has lots of big mods. Anything wrong with a separate sales receipt for the other $10k, especially if you can back it up with the original parts receipts totaling far more than that new?
 
Originally posted by kgb_agent:
Lease it to him for perpetuity for a one-time baloon payment.


Actually, if you do that, your liability as a lessor will also continue forever. However, you can lease with a $1 residual (buyout). The payments can be extremely high for a short period of time. So you can write off the huge payments, they purchase for $1. I believe this is commonly done with exotic cars. (with a residual higher than $1 but significantly less than market value)
 
I had an acquintance that did something similar to that a few years ago and the DMV didn't catch it. I was with him when he went and registered the car and the DMV agent (young kid) went out and verified the VIN just wanted to look at car and see what it was.

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ALL NSX
92 RED/BLACK 5-SPEED
 
Tell him to move to Oregon
smile.gif
No sales tax and only approx $60 to register it for two years
smile.gif


And it only rains here twice a year.
Once for 6 months
And the second time for the other 6 months.

[This message has been edited by nsxxtreme (edited 23 October 2002).]
 
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