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I searched around fatwallet and google but was unsuccessful, if there is a useful link please let me know.

I purchased a car from a relative's employer for $7500. I received the title, bill of sale, and the Certificate of Lienholder Release. The car is probably worth about $9,500 and I plan to sell it for profit.

Since I am selling it right away, is there is a way I can transfer these documents to the next buyer to avoid registering it and paying sales tax? I'm trying to avoid having to first get the title in my name, wait for the DMV to send the title, get the plates, pay sales tax and register the car. Any help would be appreciated.

I am not trying to avoid tax if I am legally obligated to pay it, but if I am able to pass on the title somehow without having the obligation to pay, I would like to explore it.

Edit: Yes I have checked the DMV website and there is nothing that addresses this.

Edit: Spoke to the DMV and there isn't a way around it, or any way they are willing to share. I continued to do a bit of research but it seems there isn't a legal way that I can find in my state to avoid this.

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You will be liable for any tickets or anything else incurred in the past five months if you just write your name in the ... (more)

SUCKISSTAPLES (Dec. 30, 2010 @ 2:11a) |

I see your point but what if seller cannot get bill of sale for previous owner?

SIS thanks for your responses I think I f... (more)

Count26 (Dec. 30, 2010 @ 2:40a) |

Most of us here spend more time and effort than that just to get a 1/2 price meal deal.

cajundavid (Dec. 30, 2010 @ 7:31a) |

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In before the obligatory

PAY YOUR TAXES, DEADBEAT.

check your DMV online, likely the answer is on their FAQ.

I'd be suspicious of some guy who was selling me a car with someone else's name on the title.

Sounds like you would need to have a dealers license to do that, but what do I know... Im not the DMV.

As long as the other seller signed title, and you have the bill of sale, don't write your name as the new owner, don't register it and you won't pay tax.

But it's kind of hard to explain to the next buyer but don't have to disclose until time to transfer title. Just make sure to have 'bill of sale' in order..

Source: I've done it in FL for a car that I used for hobby car that I tinkered around with and sold it a week later but for $0 profit.

Technically you aren't supposed to but in most states you can have the seller sign the title and a bill of sale. Then you just fill in the new owners information when you go to sell it. It isn't uncommon I have bought a few cars with similar titles but it is possible that it will spook some potential buyers. I think I would be more concerned about it with a $10k car than the $1000 beaters I usually buy.

If the employer is ok with this , simply be the middleman for the transaction between employer and end buyer and charge a $2500 sellers fee

Most curbstoners just take signed over titles from sellers and pass them directly to the end buyer without putting their name in the chain of title

It's usually not proper , unless done as I noted above

if something happens and the buyer goes after your relative's employer, that would be bad

I'd be really shocked if there is any state that has a "selling it right away" rule

I understand that OP is just asking the question --- but it is amazing how a lot of people invent reasons in their own mind to not follow the law

if you really want to follow the law --- you wouldn't be afraid to call up your DMV (this is a FAQ even if not on their web site)

SUCKISSTAPLES said: If the employer is ok with this , simply be the middleman for the transaction between employer and end buyer and charge a $2500 sellers fee

Most curbstoners just take signed over titles from sellers and pass them directly to the end buyer without putting their name in the chain of title

It's usually not proper , unless done as I noted above


in this case the purchase is already complete

so I wouldn't bother an employer with this .... if I was the boss I would probably be insulted and look at this trailer trash type dealings

of course, if you work at a tow truck company that might be something else

DMV can't/won't offer you creative suggestions unless you get a helpful rep (good luck)

One strategy actually told to me by a DMV rep is to title it in both names -of you plus the end buyer , as your "or" the other person. Then later remove your name from the title so it's not "x or y" and just y left on title

But the end buyer needs to be ok with that arrangement

Thanks for the feedback and experiences, it is very helpful. I will call the DMV and update the thread so if others are in a similar situation they have some direction.

I've actually seen a SeaDoo dealer white out the "buyer" portion of a pink slip and put my name on it. This was for a used SeaDoo I bought that someone traded in just a week before. Then, the dealer submitted the pink slip to the DMV and DVM sent me a new one.

Don't tell the buyer the name on the title is not you. Or says it's your brother.

germanpope said: I'd be really shocked if there is any state that has a "selling it right away" rule

I understand that OP is just asking the question --- but it is amazing how a lot of people invent reasons in their own mind to not follow the law

if you really want to follow the law --- you wouldn't be afraid to call up your DMV (this is a FAQ even if not on their web site)


While I understand and generally agree with what you are saying most states don't charge sales tax when a business buys inventory for resale and car dealers aren't paying taxes on every car they buy to resell so why should the OP need to pay sales tax on that amount if he is buying to resell?

I have done this before in CT. You need the paperwork back to the current title, so you would need the following:

  • Original title signed over to you.
  • Bill of sale from original owner to you.
  • Bill of sale from you to new owner.


Obviously, it may be different in other states, but that is how you pass the buck and avoid paying the sales tax. I would be up-front with the new buyer and let them know you bought the car and then realized it wasn't for you and need the money. I would also wait a month so that if your employer asks, you can tell them that you changed your mind and decided to sell it. Keep in mind they may be upset about this... You could always say you sold it to an underpriviledged relative or something....

two tax issues.
your tax issue is recording the capital gains.

the buyer's tax issue is paying sales tax.

Often, the buyer asks to pay in cash and document the sale at a lower amount. up to the buyer.

If the title isn't in your name, you likely wont have to record a capital gain. just be the intermediary.

ensignlee said: In before the obligatory
PAY YOUR TAXES, DEADBEAT.

Here is the part that I don't get..
1) Brand new car sells for $15,000 and someone pays taxes on it
2) Car is then re-sold to someone else for $9,500 and someone pays taxes AGAIN???

The taxes were already paid at item #1 so now sure why they have to be paid again on item #2. I honestly never got this with cars which is why I don't have one

OP, is thinkintg like a FT should. Why the red?

My guess is because FWF has gone downhill over the last 5 years. Creative strategies about profiting, investing and cost saving ideas through uncommon methods use to be the heart of FWF. Now, the victimizing threads and articles where people make stupid mistakes receive green, like this one. or this one..

There are a lot of great member's here, but trolls have bled over from other means so they are drowned out in the noise.

Sorry, getting off topic.

Google: Curbstoning

Right way to do it: Register the car in your name and then sell it. But to each their own!

This seems like an awful lot of trouble and potential headaches for a mere $2000.

A mere $2k... There is a thread with over 250,000 views and 5,000 posts about ordering dollar coins for rewards points, unwrapping the rolls of coins, strategies on how to quickly unwrap them, and then driving to the bank to deposit them.

I don't see how their time or money any different color than his.

yaijic said: ensignlee said: In before the obligatory
PAY YOUR TAXES, DEADBEAT.

Here is the part that I don't get..
1) Brand new car sells for $15,000 and someone pays taxes on it
2) Car is then re-sold to someone else for $9,500 and someone pays taxes AGAIN???

The taxes were already paid at item #1 so now sure why they have to be paid again on item #2. I honestly never got this with cars which is why I don't have one


you need to take in consideration that he bought it for 7,500 and selling it for 9,500. So Uncle Sam will want to tax him for the 2,000 he will profit from. damn taxes

If your name is not on the title then you can pretend to be the owner and not transfer the title to your name. Of course you will also have to fake a bill of sale. This is very common and if the buyer doesn't mind then go for it. If your name is on the title document already then you will have to register the vehicle in your name first before you can sell it. Declaring capital gains is entirely up to you....just remember nice guys finish last

stunna503 said: yaijic said: ensignlee said: In before the obligatory
PAY YOUR TAXES, DEADBEAT.

Here is the part that I don't get..
1) Brand new car sells for $15,000 and someone pays taxes on it
2) Car is then re-sold to someone else for $9,500 and someone pays taxes AGAIN???

The taxes were already paid at item #1 so now sure why they have to be paid again on item #2. I honestly never got this with cars which is why I don't have one


you need to take in consideration that he bought it for 7,500 and selling it for 9,500. So Uncle Sam will want to tax him for the 2,000 he will profit from. damn taxes


What if I bought a car for $15,000 and sold it for $9,500, can I claim the capital loss for $5,500?

assume every state is different:
Anyone in the business of buying or selling vehicles in Maryland must be licensed. A person selling 3 or more vehicles within a 12-month period may be considered an unlicensed dealer. Unlicensed dealers may face up to a $5,000 fine or up to 1 year in jail. Subsequent offenses may bring stiffer penalties.

interesting I've done this many times over the years, and even when asked a DMV clerk I've gotten anywhere from 6-8 legally without having to file as a dealer.

be honest and tell a buyer you are simply flipping it to make some money, if they get a deal and are ok getting the signed title and bill of sale then great. if not, get the title in your name from DMV as "title only" so you don't have to pay for plates & reg., yes you will still have to pay tax. mine goes from their own blue book value close to kelley or NADA. they also offer an Instant or Fast Title (extra fee) that is issued over the counter, so you don't have to wait for it weeks in the mail.

In NH you don't have to become a licensed dealer unless you have more than three cars on site tha the same time. My neighbor has one to three cars for sale at any given time. He buys 8-12 year old cars, reconditions them, maybe some moderate repairs and resells them. He probably sells one car week.

We are on a busy road, so he just puts them out on the road with for sale signs and they always sell.

His standard mode of operation is buy the car from a private party, have the party sign the title but don't fill out the name/data. Then when he sells the car he does a bill of sale and completes the name/date on the title. We don't have a sales tax, so nobody cars. The state does warn buyers not to buy cars like this, but only for comsumer protection reasons.

please change the thread title to "flipping cars for fun and profit"

I don't know how ethical this is but you can tell the dmv it is a gift to the person and they don't have to pay taxes on it

isobro said:   I searched around fatwallet and google but was unsuccessful, if there is a useful link please let me know.

I purchased a car from a relative's employer for $7500. I received the title, bill of sale, and the Certificate of Lienholder Release. The car is probably worth about $9,500 and I plan to sell it for profit.

Since I am selling it right away, is there is a way I can transfer these documents to the next buyer to avoid registering it and paying sales tax? I'm trying to avoid having to first get the title in my name, wait for the DMV to send the title, get the plates, pay sales tax and register the car. Any help would be appreciated.

I am not trying to avoid tax if I am legally obligated to pay it, but if I am able to pass on the title somehow without having the obligation to pay, I would like to explore it.

Edit: Yes I have checked the DMV website and there is nothing that addresses this.


Not unless your a dealer. Otherwise, if the person you are buying it from doesn't have a clue, you can do something shady...

Just have the guy you are buying the car from, sign the back of the title as seller.... leave the buyer area blank. This is called an 'open title'.

This may or MAY NOT work. If you get a cash buyer, it should be fine. You just put their name on the back of the title when you get the money. IF they get a bank loan, the bank will only turn loose of the funds to the person on the title...which would not be you.

Good luck...

suezyque said:   This seems like an awful lot of trouble and potential headaches for a mere $2000.

tap tap tap

my sarcasm meter is broke or did a FWFer really say that??

yaijic said:   ensignlee said: In before the obligatory
PAY YOUR TAXES, DEADBEAT.

Here is the part that I don't get..
1) Brand new car sells for $15,000 and someone pays taxes on it
2) Car is then re-sold to someone else for $9,500 and someone pays taxes AGAIN???

The taxes were already paid at item #1 so now sure why they have to be paid again on item #2. I honestly never got this with cars which is why I don't have one



We pay taxes because it costs money to provide the kind of safe environment under which we can do business transactions without much fear of being ripped off, or killed, or scammed, etc. The resale seller/buyer of goods benefits from these government regulations and enforcements just as much as the original retail seller/buyer did, so the resale seller/buyer need to reimburse "society" for the costs associated with running a civil society where such a private party deal could be so easily and safely made.

marabout said:   We pay taxes because it costs money to provide the kind of safe environment under which we can do business transactions without much fear of being ripped off, or killed, or scammed, etc. The resale seller/buyer of goods benefits from these government regulations and enforcements just as much as the original retail seller/buyer did, so the resale seller/buyer need to reimburse "society" for the costs associated with running a civil society where such a private party deal could be so easily and safely made.Nice theory but not accurate. The top spending in most, if not all, state budgets is for health and human services and education. I don't think welfare programs or public schools prevent people from getting ripped off.

yaijic said:   Here is the part that I don't get..
1) Brand new car sells for $15,000 and someone pays taxes on it
2) Car is then re-sold to someone else for $9,500 and someone pays taxes AGAIN???
This is probably why Arizona and Georgia do not charge sales tax on private party sales.

Update: Spoke to the DMV and there isn't a way around it, or any way they are willing to share. I continued to do a bit of research but it seems there isn't a legal way that I can find in my state to avoid this.

Thanks for your help everyone.

Legal way? Sure. Get a dealers license.
Otherwise, regardless of how you slice it, you're "curbstoning".

If you wanted to do it, I would have gotten a notarized power of attorney on the vehicle, then you can sign as the owner.
It wouldn't be legal if you at any time "owned" the vehicle.

SUCKISSTAPLES said:   DMV can't/won't offer you creative suggestions unless you get a helpful rep (good luck)

One strategy actually told to me by a DMV rep is to title it in both names -of you plus the end buyer , as your "or" the other person. Then later remove your name from the title so it's not "x or y" and just y left on title

But the end buyer needs to be ok with that arrangement


Is there a penalty for not registering after 10 days allowed period from the DMV. I currently in a similar situation but I'm the buyer and not the seller. I would be fine with having seller's name and my name on it and then removing it. I'm just a bit worried about any fees associated with the vehicle.

Here's a summary of my problem:

Seller guys is not registered on the title. He does have the previous owner sign off on title. Seller hasn't registered vehicle under his name but has filled out the new owners portion of the title. It has been more than 5 months now. Is there a way the seller can transfer ownership to me?

Go to DMV with him and present 2 bills of sale- one from previous owner to him, and one from him to you. There probably will be a penalty if the previous owner signed and dated the title five months ago

Skipping 4 Messages...
suezyque said:   This seems like an awful lot of trouble and potential headaches for a mere $2000.

Most of us here spend more time and effort than that just to get a 1/2 price meal deal.



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