I have a car registered in Connecticut. I want to give the car to my sister in Oregon. The blue book value of the car is approximately $5000. (It will be a very generous gift - but the car was a gift to me from our dad anyway, so I suffer no real net loss.) I am wondering about the logistics of changing the car's ownership, especially from a tax perspective. Should I give it to her as a gift, or sell it to her at a very low price (say, $1, $50, $100)? What issues are there for me to keep in mind, tax-related or otherwise?
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3You are suffering a loss; you won't have the car as an asset anymore. The source doesn't matter as far as determining whether or not you have a loss. – jason Jan 05 '12 at 17:36
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1@Jason You're right, technically speaking. Morally speaking I'm breaking even - my conscience wasn't going to let me sell the car and pocket the cash when I didn't lay anything out for it at the beginning. – hairboat Jan 09 '12 at 20:48
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6Technically correct---the best kind of correct. :-) – jason Jan 09 '12 at 20:55
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@abbyhairboat It's your sister, just give it to her! – MDMoore313 Dec 22 '14 at 23:36
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No logistics, just sign the title. Gifts under $14K (as of 2015) (total per year per person you give gifts to) are tax exempt. If you're not going to give any more cars to your sister this year - you're good to go.
JTP - Apologise to Monica
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littleadv
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1$5K? You can give her another similar priced (or up to $8K) this year, no tax issues. – JTP - Apologise to Monica Jan 04 '12 at 19:09
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In general, intentionally selling something for below true value won't redefine the true value, so it shouldn't have tax implications relative to just selling it for free or for the full value.
Or to put it another way, you can't lie about the value in order to avoid taxes.
Scott McIntyre
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