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Discussion Starter · #1 ·
OK so we all do it, we buy the car for lets say $20k and for DMV we bought the purchase price of $5,000 or something to save on getting taxed the crap out of. I personality think that private party tax is the dumbest idea i have ever heard ever!! There is no reasonable explanation of this unreasonable tax, and none of us know where that money goes so im assuming to some guys pocket. Private party things should not be taxed period, especially if things are old like 10 years old. Its like im trying to sell you my bike and then tax you, what kinda crap is that?!! DMV gets their money from the registration fees and license fees, etc. So... let me get to my point...

So lets say that car that i want to buy is $20k but me and the seller agree that he is selling me the car for $5k and the rest $15k is like a gift to him, so he puts $5k on the dmv forms.

BUT lets say i go to the bank and get a $15,000 autoloan (not personal loan) with autoloan they need the vin number of the car before they can give me that cashiers check. So lets say i take that $15,000 autoloan cashiers check and $5,000 in cash and go get the car. Me and the guy lets say agree he will put $5,000 on the DMV paper work and im giving him the $15,000 cashiers check as a gift. But since i never done this before with a chashier check autoloan way would it still work putting $5k on the bill of sale and DMV would not question me, this is why im asking if anyone has used an autoloan before and put much less on the bill of sale compared to the autoloan they got from the bank and DMV and nobody asked no questions and no probs?

Hope all that made sense
 

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Theoreticly, here in Va all we need is a bill of sales to prove how much we payed for it. That being said, you could theoreticly just give the guy the money, and ask him to leave the bill of sale price blank. They can not dispite what is on the bill of sale in va, not sure what the communists in cali can do though. However, if you dont have a bill of sale here, they will charge you a percentage of the book value
 

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I wouldnt risk it. I know that with small businesses the IRS watches like a hawk. They can actually look at transactions between your account and customers. So say you bill a customer 100 and and they see he wired you 600 your fucked. Be carfull they have alot of power and you dont want to get in trouble for a federal crime.
 
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Discussion Starter · #4 ·
But i mean lets say i get that $15,000 autoloan and then i have that $5,000 cash and when i was getting ready to buy the car we had a little talk and he decided to drop the price of the car to $5,000 just for me! and i go... well crap... i do have $5,000 in cash so here you go so he puts that he sold it to me for $5,000 and then i still have that $15,000 autoloan cashiers check and then i notice that his house catches on fire as im driving away... so me being a nice person i turn around and i say "crap dude!! your house is on fire!! thats gonna cost tons of money to repair well i was gonna take this cashiers check back to the bank, but tell you what here you go, go cash it and use it for your repair, and thanks for the great deal on the car!!!"
 

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Will work for Supra parts
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My advice, don't try to weasle your way out of the tax. I paid my dues to get my Supra and you should too. Yeah, it's a crock I had to to pay 5% sales tax in my state in order to get the title and plate, which brought the total just under $2,000, but that's the way it is. That $2K could have gone for modifications, and I'm not by any means a middle aged rich guy, but what else are you going to do besides cheat? You like living in the USA, right? Pay the tax.
 

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disfrutando de la vida
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It is not a good idea to cheat the gov of their taxes. You may or may not get away with it. Also, you don't know who may read this, we have people on this board that work for the gov. and law enforcement agencies. And, reguardless is not a good thing to cheat, honesty and honor says a lot of who we are. I would never thrust anybody that cheats.
 

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In The Sonoran Desert
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if the 15k is a gift, he has to pay gift tax on it.
 

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Also the insurance can screw you if you got into an accident. If the car was sold for 5k and you total it, unless you can show receipts for repairs or something, they can just give you the 5k.
 

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95Turbo
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I think i paid tax to the DMV on my first supra...i dont remember.

But on this one i just said it was a "gift" and wasnt taxed. I wasnt sure how to go about it so i went into the tag agency with the selling price left blank. The girl, who was quite cute and flirtatious, behind the counter acted all cute as she mentioned she'd just put it down as a gift so i wouldnt have to pay any tax. :) AWW HOW NICE lol.

If it had been someone else, i woulda just told them it was a gift and that i didnt know to write that in there.

P.S. Im not sure how that would work if you got an autoloan. And on a side note.. when i tried for an autoloan on my 95.. the bank said they didnt give loans for cars that old.

John
 

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Honestly, do not ask these type of questions on a public forum.
You are asking advice on a fraudulent transaction. Do many do it? Yes.
But, the only thing worse than committing a crime, is asking about how to commit a crime and leaving a paper trail.
I would recommend deleting this thread.
 

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You can deduct the amount of tax you pay on the car from your Federal Income Tax. But i think you have to itemize to get that deduction.
 

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!black
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flexysteve8 said:
Also the insurance can screw you if you got into an accident. If the car was sold for 5k and you total it, unless you can show receipts for repairs or something, they can just give you the 5k.

Wrong.

Insurance has nothing to do with the purchase price of a car, it's based on value (either declared or book)

The insurance company can't deem the value of a vehicle less because you got it as a gift, or paid a dollar for it. The value is deturmined by book values and other factors for ALL cars of that make/model in the US.
 

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!black
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msivyhuynh said:
OK so we all do it, we buy the car for lets say $20k and for DMV we bought the purchase price of $5,000 or something to save on getting taxed the crap out of. I personality think that private party tax is the dumbest idea i have ever heard ever!! There is no reasonable explanation of this unreasonable tax, and none of us know where that money goes so im assuming to some guys pocket. Private party things should not be taxed period, especially if things are old like 10 years old. Its like im trying to sell you my bike and then tax you, what kinda crap is that?!! DMV gets their money from the registration fees and license fees, etc. So... let me get to my point...

So lets say that car that i want to buy is $20k but me and the seller agree that he is selling me the car for $5k and the rest $15k is like a gift to him, so he puts $5k on the dmv forms.

BUT lets say i go to the bank and get a $15,000 autoloan (not personal loan) with autoloan they need the vin number of the car before they can give me that cashiers check. So lets say i take that $15,000 autoloan cashiers check and $5,000 in cash and go get the car. Me and the guy lets say agree he will put $5,000 on the DMV paper work and im giving him the $15,000 cashiers check as a gift. But since i never done this before with a chashier check autoloan way would it still work putting $5k on the bill of sale and DMV would not question me, this is why im asking if anyone has used an autoloan before and put much less on the bill of sale compared to the autoloan they got from the bank and DMV and nobody asked no questions and no probs?

Hope all that made sense

1) Bank does not care how much the actual selling price is, only that you have satisfied your % of the equity in the vehicle. Usually, it's 20%. Lets say I found a car that was a fantastic deal at 10K. Book value is 13K. I could walk into the bank and say "I'd like to buy xxxxxx car, I need 12K". Most auto loans usually ask you to satisfy 20% of the equity. They would look at the book value of the car, and say "well, it's worth 13K, but we need you to satisfy 20% of that...so we'll give you 10,400$ and you must supply the rest. Well, it doesn't matter where the equity comes from, if it's your cash or automatic equity in the car for sales price vs. value. So in essence, since you're buying the car at 10K (but the bank doesn't need to know this, you need 12 remember?) with no money out of pocket. **UNLESS** it is a purchase from a dealer, the bank will make the check out to whom ever you are buying the vehicle from w/o having to see a contract with a stated sales price.
That is the way it works for most banks I've ever delt with anyway.

2) No need to worry about the gift part. Despite all the conspiracy theorists, the US government does not activly monitor your checking accounts. They can't, that is illegal. What CAN happen is that if a *cash* purchase of over 10K is made, it is *supposed* to be reported to the IRS. You can, on paper, purchase that car for a dollar. What he does with the money you give him is HIS problem. Unless you are trying to claim the money as a gift on your schedule A (you can't, and it would be stupid to think so), uncle sam doesn't give a shit. He only cares about how much money you MAKE, not SPEND. If the seller has the title in his hand, then draw up a bill of sale for 5K. You could give him a check for 15K, and only 5K was for the sale of the car. 10K could be for the purchase of a pencil, or a piece of paper. All of which, is legal. He should have no tax issues either, unless the money is to satisfy a bank note first. Then the note would have to be satisfied for the amount he owes before the title was released, and the sales price afterwards is his problem.


To get to the point, do what ever you want. If the bill of sale says the car was sold for 5K, then thats what it sold for. As far as the DMV goes, they have no way of verifying the sales price of the vehicle, nor can they just pop their heads into the sellers account to see how much bank is there. The only issue you will face is the bank, the bank will require the bill of sale and title, as they hold the title as security. They might have some questions on why it says 5K sales price when you took out a 10K loan, but it really doesn't matter. Their equity is secured in the car. If you default, then they still make money, as the car is worth more than they loaned out.

Hope that helps
 

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!black
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crossways said:
Honestly, do not ask these type of questions on a public forum.
You are asking advice on a fraudulent transaction. Do many do it? Yes.
But, the only thing worse than committing a crime, is asking about how to commit a crime and leaving a paper trail.
I would recommend deleting this thread.
Technically, if buyer and seller both agree on a sales price of 5K for the car (regardless of value), then there is no fraud. Fraud is one of the HARDEST things to prove in a court of law. As far as any DMV record goes, the car was sold for 5K. NOTHING they have would have the money commited from buyer to seller for items other than said vehicle at the time of purchase (IE, handing the guy a 15K check).

He could hand a perfect stranger 10K for no reason, without any paper at all. Or he could buy the ultra-rare burgerking wrapper that the guy has for 10K. The point is, the government cannot impeed what or how you buy as long as the goods/services are legit.
 

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!black
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mpower said:
I wouldnt risk it. I know that with small businesses the IRS watches like a hawk. They can actually look at transactions between your account and customers. So say you bill a customer 100 and and they see he wired you 600 your fucked. Be carfull they have alot of power and you dont want to get in trouble for a federal crime.

Nothing about the question asked has anything to do with federal.
And no, they do not monitor your accounts. They do however look at your tax records every year, and if they find descrepencies, then you get audited. THATS when the 100$ bill for 600$ income would come back to bite you.

Operate inside their guidelines, and you won't have a problem. You would be amazed how broad the guidelines are...most people who get fucked are those who 1) are greedy and make a stupid mistake or 2) don't keep correct books (read: don't have a good CPA, or don't know how to hide things correctly).
 
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Discussion Starter · #18 ·
Thanks MadMax and you are right, its between the seller and the buyer... so why the heck does the government need to get into this and get some free money just because they can.
 

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MadMaxx said:
Technically, if buyer and seller both agree on a sales price of 5K for the car (regardless of value), then there is no fraud. Fraud is one of the HARDEST things to prove in a court of law. As far as any DMV record goes, the car was sold for 5K. NOTHING they have would have the money commited from buyer to seller for items other than said vehicle at the time of purchase (IE, handing the guy a 15K check).

He could hand a perfect stranger 10K for no reason, without any paper at all. Or he could buy the ultra-rare burgerking wrapper that the guy has for 10K. The point is, the government cannot impeed what or how you buy as long as the goods/services are legit.
It's not a question of whether or not you believe the government should be involved in the transaction or whether or not you personally deem it unfair. Of course it's unfair, noone here is lobbying to be taxed up the poopshoot. The fact is, it is the law and it is tax evasion. The government and state have infinitessimal resources to recoup their lost revenues if they deem it necessary. If you take out a loan there will be a paper trail which will instantaneously lead back to you.

Do as you please, but don't ask on public message boards whether this is OK. Of course you know it's not OK nor legal. Your question is basically asking others if they have "gotten away with doing the same thing" so you can have peace of mind in committing the same crime.
 

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msivyhuynh said:
Thanks MadMax and you are right, its between the seller and the buyer... so why the heck does the government need to get into this and get some free money just because they can.
Technically, it's not between you and the seller. It's between the financing company and the seller. The financing company owns the car until you pay off the loan. The financing company will only finance whatever is written on the pink slip and if you put a lower amount, you are screwed because you have to come up with the rest of the money.
 
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