Best STRATEGY to buy my Dad's Truck from Him?

[SumpChump]

My Pops doesn't seem to have too long for this world. The mind is willing but due to the complications of a massive heart event 2-3 years ago and ensuing paraplegic status.... the flesh is weak.

He wants me to have his Truck A Dodge Hemi Daytona.

I'm looking for advice on how to best buy it or gift it or inherit it or whatever, from him so as to avoid unsavory estate tax or death tax or other sneaky retroactive taxes later if he passes fairly soon. I heard that if someone doesn't last 5 years past the "gift" that death tax is due. So I assume a flat out "purchase" is the cleanest "break" of ownership??

Anyone know ANYTHING about this? The State is Wisconsin.

I don't want to "buy it for $5" on the title and then have some red flag send folks from the Department of Revenue calling or something.

I hope my point is coming across.

 

[Mr Nice]

Here in Florida, you sign the title and you write 'gift' in the box for sale price. You just pay $70 fee to transfer title into your name, zero tax paid.

 

[mazdamonky]

Just buy it for $5. There isn't much they can do. A sale is a sale. If it makes you feel safer, have him sell it to somebody outside of the family for $1 then have them sell it to you for $5. That way they make a profit of $4 and they can't say it was a gift as the other party had the choice to keep it. What year range is it?

 

[AlienBug]

http://www.dmv.org/wi-wisconsin/title-transfers.php

 

[KingCake]

Depends on the state. In some state saying you buy it for $5 doesn't save you much b/c tax is attached to plate and not a sales tax.

 

[bullwinkle]

You're better off to put it down as a gift, especially if you're obviously close family members. That way it doesn't set off the sales tax alarm bells.

 

[JayhawkRoy]

Wisconsin no longer has an estate or death tax, effective 1 Jan 2013.
https://www.revenue.wi.gov/taxpro/news/2013/130819.html

Talk to your local DMV to transfer as a gift now or upon death. Wisconsin allows both and the procedure appears fairly simple.

 

[atikovi]

What are you trying to avoid? Sales tax, estate tax or death tax? Once it's put in your name, the latter two would be mute. And in most states, gifts of cars from parent to child are tax exempt, you just pay a title fee.

 

[KingCake]

Or you could not evade taxes and help pay for the roads you use. I know. Crazy idea.

 

[Gasbuggy]

In my experience, you're better off listing that you paid nothing rather than saying you paid $5. Every state is different, I don't know how it works there. But when you say you paid X amount they compare it to book value and say No Way! But if you say it was free that is the truth and not always looked into like a low claimed sale price.

 

[Gasbuggy]

Originally Posted By: KingCake
Or you could not evade taxes and help pay for the roads you use. I know. Crazy idea.


Why should he pay taxes on something that he did not pay for?

 

[gathermewool]

Originally Posted By: KingCake
Or you could not evade taxes and help pay for the roads you use. I know. Crazy idea.


In that case, I should probably have paid tax when adding my name to my wife's title and she mine, because she bought her car and me mine before getting married. We can drive this train all the way to crazy town!

IMO, if the giver doesn't want to make a profit, be the giver friend or family, then the government shouldn't profit, either. Most people DO want to make a profit on the things they sell; sometimes, we don't on the things we'd prefer to give away.

 

[raytseng]

I think you should visit an estate lawyer and get things in order, as you're getting things mixed up if you're talking about needing to avoid taxes on death on such a small thing as a car.

Your dad's annual gift exclusion is $14,000 per year. Plus the lifetime exclusion of $5.45Million.

So unless your Pops has more than $5.45 million the entire amount of the estate should be able to be transferred to you without taxes.


But the way you phrased your OP, it seems like you're not too familiar with these things, and given I highly suggest to get in touch with an estate planner to help you get things in order.

 

[Eddie]

Or you could ask someone who knows about your state laws like a notary?

 

[pbm]

In NY state a family member can 'gift' a vehicle to another family member and pay no sales tax..Just do it before he passes or you'll have a whole other problem (changing title when the owner is deceased is a PITA).

PS: I agree, why should he pay tax on a gift?

 

[surfstar]

Answer is in the third reply.

Rest is needless BITOGery

 

[javacontour]

Originally Posted By: KingCake
Or you could not evade taxes and help pay for the roads you use. I know. Crazy idea.


Wasn't tax paid when it was purchased new? Why should it be double taxed?

 

[SumpChump]

Originally Posted By: raytseng
I think you should visit an estate lawyer and get things in order, as you're getting things mixed up if you're talking about needing to avoid taxes on death on such a small thing as a car.

Your dad's annual gift exclusion is $14,000 per year. Plus the lifetime exclusion of $5.45Million.

So unless your Pops has more than $5.45 million the entire amount of the estate should be able to be transferred to you without taxes.


But the way you phrased your OP, it seems like you're not too familiar with these things, and given I highly suggest to get in touch with an estate planner to help you get things in order.



This brings up a HUGE question mark then!

He HAS gifted me the $14,000 limit this year. So the truck,if gifted also, will raise the gifted total over that in $14k value? I think it will, yikes.

So now I HAVE to make it a sale deal which means he can't sell
It to me for $500 or something. It will have to be high enough to not trigger some other "reasonable sale value" inquiry.

Oh [censored] !! Actually I am very glad you pointed this out. I would have been up a creek! I am understanding this correctly right?

 

[Srt20]

In the state of WI, a parent can sell or give a vehicle to a child tax free. Immediate family is tax exempt.

Look it up.

 

[SumpChump]

Originally Posted By: Srt20
In the state of WI, a parent can sell or give a vehicle to a child tax free. Immediate family is tax exempt.

Look it up.


Ok, that's awesome. So I basically "buy" it from him for a reasonable. Amount or do you think the the $5 sale still wouldn't cause any phone calls or supervisor visits?

I think the gift "check box" option is out the window since I already at this year's $14k gift amount.