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Chris T., JD
Chris T., JD, Attorney
Category: Legal
Satisfied Customers: 4816
Experience:  Experienced in both state and federal court.
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My daughter has a poor credit rating. She wanted to buy a new

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My daughter has a poor credit rating. She wanted to buy a new car so her fiancé' put the car, and financing in his name, but she paid the down payment and is making the payments. He has no financial interest in the car but its in his name. This was against my advice.
As you can imagine, the engagement is off and there is a semi truce. I'm buying the car for her (#$@$&). Is there any way of getting around paying the sales tax again? The car was originally purchased on 6/1/11. The car is registered in New Jersey but I will be registering it in New York. There is a possibility of registering in New Jersey if that will help.

TexLawyer :

Good afternoon. I'll be assisting you with your question.

TexLawyer :

Below is a list of exemptions for paying sales tax on a vehicle:

TexLawyer :

Did your daughter pay for the vehicle, or is there still money owed on it?

TexLawyer :

I ask because the only way I could see getting around the sales tax is to use the gift exemption.

Customer:

My daughter made all payments so far, but there is still $32500 due on the original loan. I have since made a car loan from USAA bank and the title is in the mail, hopefully to me.


 


He is agreeable to sign the gift papers, put there will still be a lien on the car. The way I read the law, if there is a lien on the car after the gift, there is sales tax due

Customer:

Also, would the gift option open up federal tax liabilities?

TexLawyer :

That is correct. One cannot gift what one does not own, which is why I was asking if anything was still owed.

TexLawyer :

Since there is no federal sales tax, there would not be any tax implications simply by virtue of the sale, but the seller may have to report some income on his federal income tax.

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