Gifting $24,000 car to son—Gift tax exclusion

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own the car now and the title is in my name alone. I plan that give it to my son later this year. I am married, but my husband is not on the title.

Assuming the car is still worth $24,000, is this gift considered within the 2x $19,000 annual gift tax exclusion? Or is it a gift just from me since my name is on the title (and my $19,000 exclusion)? I don’t want to file the gift tax form with taxes next year.

Have your son buy it for a dollar. That's what my parents did to get around this.

That doesn't get around gift tax issues. She would be gifting him $24k-$1.

Nah. No one knows the condition of a car and the value is what someone is willing to pay.

I'm obviously assuming her $24k is accurate. If the car is worth something like $10k, she wouldn't be asking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own the car now and the title is in my name alone. I plan that give it to my son later this year. I am married, but my husband is not on the title.

Assuming the car is still worth $24,000, is this gift considered within the 2x $19,000 annual gift tax exclusion? Or is it a gift just from me since my name is on the title (and my $19,000 exclusion)? I don’t want to file the gift tax form with taxes next year.

Have your son buy it for a dollar. That's what my parents did to get around this.

That doesn't get around gift tax issues. She would be gifting him $24k-$1.

Nah. No one knows the condition of a car and the value is what someone is willing to pay.

I'm obviously assuming her $24k is accurate. If the car is worth something like $10k, she wouldn't be asking.

When it comes to used cars there is no such thing as “accurate”. It all depends.

[Anonymous]

Anonymous wrote:“Nobody cares” - now that is some very practical and highly ethical financial advice.

also true

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own the car now and the title is in my name alone. I plan that give it to my son later this year. I am married, but my husband is not on the title.

Assuming the car is still worth $24,000, is this gift considered within the 2x $19,000 annual gift tax exclusion? Or is it a gift just from me since my name is on the title (and my $19,000 exclusion)? I don’t want to file the gift tax form with taxes next year.

Have your son buy it for a dollar. That's what my parents did to get around this.

That doesn't get around gift tax issues. She would be gifting him $24k-$1.

Nah. No one knows the condition of a car and the value is what someone is willing to pay.

I'm obviously assuming her $24k is accurate. If the car is worth something like $10k, she wouldn't be asking.

When it comes to used cars there is no such thing as “accurate”. It all depends.

You are being pedantic or obtuse. There are accepted ways to value a car like appraisals or private party value on one of the valuation websites. Those methods will account for mileage, condition, etc. OP can't just declare the car to be worth less than $19k to make the issue go away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own the car now and the title is in my name alone. I plan that give it to my son later this year. I am married, but my husband is not on the title.

Assuming the car is still worth $24,000, is this gift considered within the 2x $19,000 annual gift tax exclusion? Or is it a gift just from me since my name is on the title (and my $19,000 exclusion)? I don’t want to file the gift tax form with taxes next year.

Have your son buy it for a dollar. That's what my parents did to get around this.

That doesn't get around gift tax issues. She would be gifting him $24k-$1.

Nah. No one knows the condition of a car and the value is what someone is willing to pay.

I'm obviously assuming her $24k is accurate. If the car is worth something like $10k, she wouldn't be asking.

When it comes to used cars there is no such thing as “accurate”. It all depends.

You are being pedantic or obtuse. There are accepted ways to value a car like appraisals or private party value on one of the valuation websites. Those methods will account for mileage, condition, etc. OP can't just declare the car to be worth less than $19k to make the issue go away.

Do you know if OP has done that?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own the car now and the title is in my name alone. I plan that give it to my son later this year. I am married, but my husband is not on the title.

Assuming the car is still worth $24,000, is this gift considered within the 2x $19,000 annual gift tax exclusion? Or is it a gift just from me since my name is on the title (and my $19,000 exclusion)? I don’t want to file the gift tax form with taxes next year.

Have your son buy it for a dollar. That's what my parents did to get around this.

That doesn't get around gift tax issues. She would be gifting him $24k-$1.

Nah. No one knows the condition of a car and the value is what someone is willing to pay.

I'm obviously assuming her $24k is accurate. If the car is worth something like $10k, she wouldn't be asking.

When it comes to used cars there is no such thing as “accurate”. It all depends.

You are being pedantic or obtuse. There are accepted ways to value a car like appraisals or private party value on one of the valuation websites. Those methods will account for mileage, condition, etc. OP can't just declare the car to be worth less than $19k to make the issue go away.

Do you know if OP has done that?

OP said "assuming the car is worth $24,000," which is what I'm doing. She's gotten other advice about how to make sure it's actually worth that. IF it's worth $24k, as she asked us to assume, then the value she'd be gifting us $24k-$1. Charging $1 doesn't change the value to $1, it means you're gifting fair market value minus the dollar, as another poster explained.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just give him the car. Nobody is going to come after anyone for this. Do nothing.

This. Keep it in your name OP, kid pays for insurance/etc. himself.

Don’t even have to do that…give him the car…change the title. Nobody cares. It’s not something anyone would care about unless you file the gift tax form and now get on the radar.

This. The IRS isn’t checking this kind of thing.

More really horrible advice. “Take it, you won’t get caught.” Also very unethical.

[Anonymous]

You can easily add your husband’s name to the title. We did this for our cars to avoid having to pay extra for street parking (both our cars were in dh’s name).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just give him the car. Nobody is going to come after anyone for this. Do nothing.

This. Keep it in your name OP, kid pays for insurance/etc. himself.

Don’t even have to do that…give him the car…change the title. Nobody cares. It’s not something anyone would care about unless you file the gift tax form and now get on the radar.

This. The IRS isn’t checking this kind of thing.

More really horrible advice. “Take it, you won’t get caught.” Also very unethical.

First of all, this kind of transfer of used vehicles from parent to child has been going on for generations. We did ours several times at AAA. There is no sale, just a transfer of title. There is even a box to check if it involves a family member. If you want to make things complicated for yourself, go ahead.

[Anonymous]

Valuation of cars +/-$5000 is very subjective. This is not an ethics question.

Even if you were worried, the IRS would have a very hard time coming after you, because they wouldn’t be able to hire someone to evaluate the condition of the car in this particular year that you are gifting it. By next year, the car could be worth $2k (eg if it is involved in an accident) — there’s simply no proof mechanism. Just transfer it and stop worrying. It’s not like you are trying to gift a Ferrari.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just give him the car. Nobody is going to come after anyone for this. Do nothing.

This. Keep it in your name OP, kid pays for insurance/etc. himself.

Don’t even have to do that…give him the car…change the title. Nobody cares. It’s not something anyone would care about unless you file the gift tax form and now get on the radar.

This. The IRS isn’t checking this kind of thing.

More really horrible advice. “Take it, you won’t get caught.” Also very unethical.

First of all, this kind of transfer of used vehicles from parent to child has been going on for generations. We did ours several times at AAA. There is no sale, just a transfer of title. There is even a box to check if it involves a family member. If you want to make things complicated for yourself, go ahead.

Yeah I don't get it. Why can't you add your son to the title now, and then later remove yourself from the title? Do you both use the car now?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I own the car now and the title is in my name alone. I plan that give it to my son later this year. I am married, but my husband is not on the title.

Assuming the car is still worth $24,000, is this gift considered within the 2x $19,000 annual gift tax exclusion? Or is it a gift just from me since my name is on the title (and my $19,000 exclusion)? I don’t want to file the gift tax form with taxes next year.

Have your son buy it for a dollar. That's what my parents did to get around this.

That doesn't get around gift tax issues. She would be gifting him $24k-$1.

Nah. No one knows the condition of a car and the value is what someone is willing to pay.

I'm obviously assuming her $24k is accurate. If the car is worth something like $10k, she wouldn't be asking.

When it comes to used cars there is no such thing as “accurate”. It all depends.

You are being pedantic or obtuse. There are accepted ways to value a car like appraisals or private party value on one of the valuation websites. Those methods will account for mileage, condition, etc. OP can't just declare the car to be worth less than $19k to make the issue go away.

Do you know if OP has done that?

OP said "assuming the car is worth $24,000," which is what I'm doing. She's gotten other advice about how to make sure it's actually worth that. IF it's worth $24k, as she asked us to assume, then the value she'd be gifting us $24k-$1. Charging $1 doesn't change the value to $1, it means you're gifting fair market value minus the dollar, as another poster explained.

It's not necessary to state the purchase price because you are saying it is a GIFT.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just give him the car. Nobody is going to come after anyone for this. Do nothing.

This. Keep it in your name OP, kid pays for insurance/etc. himself.

Don’t even have to do that…give him the car…change the title. Nobody cares. It’s not something anyone would care about unless you file the gift tax form and now get on the radar.

This. The IRS isn’t checking this kind of thing.

More really horrible advice. “Take it, you won’t get caught.” Also very unethical.

First of all, this kind of transfer of used vehicles from parent to child has been going on for generations. We did ours several times at AAA. There is no sale, just a transfer of title. There is even a box to check if it involves a family member. If you want to make things complicated for yourself, go ahead.

Yeah I don't get it. Why can't you add your son to the title now, and then later remove yourself from the title? Do you both use the car now?

Probably because she doesn't want to be liable if he gets in an accident. If he solely owns the car and gets his own car insurance, that removes the liability from her.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just give him the car. Nobody is going to come after anyone for this. Do nothing.

This. Keep it in your name OP, kid pays for insurance/etc. himself.

Don’t even have to do that…give him the car…change the title. Nobody cares. It’s not something anyone would care about unless you file the gift tax form and now get on the radar.

This. The IRS isn’t checking this kind of thing.

More really horrible advice. “Take it, you won’t get caught.” Also very unethical.

First of all, this kind of transfer of used vehicles from parent to child has been going on for generations. We did ours several times at AAA. There is no sale, just a transfer of title. There is even a box to check if it involves a family member. If you want to make things complicated for yourself, go ahead.

Yeah I don't get it. Why can't you add your son to the title now, and then later remove yourself from the title? Do you both use the car now?

Probably because she doesn't want to be liable if he gets in an accident. If he solely owns the car and gets his own car insurance, that removes the liability from her.

Pp again. I'm assuming he's not a minor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just give him the car. Nobody is going to come after anyone for this. Do nothing.

This. Keep it in your name OP, kid pays for insurance/etc. himself.

Don’t even have to do that…give him the car…change the title. Nobody cares. It’s not something anyone would care about unless you file the gift tax form and now get on the radar.

This. The IRS isn’t checking this kind of thing.

More really horrible advice. “Take it, you won’t get caught.” Also very unethical.

First of all, this kind of transfer of used vehicles from parent to child has been going on for generations. We did ours several times at AAA. There is no sale, just a transfer of title. There is even a box to check if it involves a family member. If you want to make things complicated for yourself, go ahead.

Yeah, the people all in a twitter about "unethical" behavior and "breaking the law" are nuts. The IRS doesn't have enough people to properly process taxes, much less audit people for giving cars to their kids. Plus, even if this somehow did come to their attention, it's not like OP or the son would owe any tax now - it's filing a form.

Relax, people.