Should I report a gift-like car to IRS?

dcwilbur said:   Okay, I'll agree to answer your question if you'll agree to tell me the real story.
This is the real story. I have an older car that runs great and purchased the newer car as a second car.

I am single. My question is if I do not report, what is going to happen? Will this transaction be reported to IRS? Or will IRS find out about this transaction and could I be audited?

The tax code provides for an exclusion from gift of $13,000 in total gifts to each person during the year without the gift being a taxable gift. Gifts given to any person that exceed $13,000 are taxable gifts. A taxable gift first reduces the donor's lifetime credits against gift tax and estate tax. Once the gift tax credit of $5 million is used up, additional taxable gifts are required the donor to pay gift tax at rate of about 45%.

Can I have a car? I need it for my "side" business.

taxmantoo said:   If you're married, then your wife and you each gifted half of a $25k car, and it's under the limit.
If the recipient is married, then you gave half a $25k car to him and to his wife, and both gifts are under the limit.

Otherwise, you report it and take the hit against your unified credit.Since the gift exceeded $13k, even if you are married, you still have to file Form 709 and have your spouse consent to gift splitting in order to take advantage of this provision. You wouldn't owe any taxes.

Glitch99 said:   BrunoB said:   dcwilbur said:   Okay, I'll agree to answer your question if you'll agree to tell me the real story.
This is the real story. I have an older car that runs great and purchased the newer car as a second car.You didnt drop $25k on a new car, then decide to just give it away because you dont need it. Besides, you arent going to walk into a dealership a few days later and get them to change paperwork that has already been completed - at best you're going to get them to process an additional title/registration transfer from you to the other person, and you gifted a one-owner low-milage used car.
It was the 2nd or 3rd day and they were still processing the sales. The car was leased. The document I signed was called STATEMENT OF FACTS. No additional title/registration transfer was needed. I had only to pay additional sales tax for a different City/County.

uutxs said:   BrunoB said:   It was the 2nd or 3rd day and they were still processing the sales. The car was leased.
BrunoB said:   In 2011, I purchased a car for over 25K in cash.
PS: By cash, I mean writing a check on a bank account not hard cash.
One is not the same as the other! Which is it?
The car was 2009 model and was a leased car (was used previously in its former life as a leased car). I wasn't leasing that car.

No they aren't

The answer to your Question is Yes, you should report it, but you knew that before you posted this question.

NO they are not "actively" reported. But IRS may look into suspicious money, land, and other property transfer records in some cases. So the question to your answer is NO, which proves again that SUCKISSTAPLES is giving the correct advice!

consumerreports.org
May 27, 2011

The Internal Revenue Service is looking at land-transfer records state-by-state for evidence of people neglecting to report within-family real-estate gifts.

This year, large family land gifts were popular because of a new tax rule that established $5 million as the amount someone can give in a lifetime before having to pay a gift tax. However, any property worth more than $13,000, gifted to one person, is still supposed to be reported to the IRS. To be precise, Form 709 reports U.S. gifts and generation-skipping transfer taxes.

The Wall Street Journal reported the IRS effort to find land gift data after examining a court document that the IRS filed in California in an attempt to gain access to information in that state. According to the document, the states that have given the IRS information on gift-like transactions include Connecticut, Florida, Hawaii, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin.

According to that same document, the noncompliance rates in several of those states were as follows:

Wisconsin: 50 percent
Connecticut and Nebraska: 60 percent
Washington: 80 percent
Florida and Virginia: 90 percent
Ohio: 100 percent

His original question was if this type of transaction is reported to the IRS. The answer is no. You are supposed to report it yourself , a third party does not report it to the IRS .

That's very different from the IRS doing it's own inquiry. They can certainly do that, although the chances of them inquiring about this vehicle transaction are slim to none. Real property transfers are very different from car transfers, since most RE transfers exceed the annual gifting limit while most car transfers do not

You plan to help out a relative in distress by offering them a car worth more than $25k? A better financial decision would be to buy them a used car and give them the remaining cash.

If I had to guess, a relative bought a car on your behalf but forgot about the gift tax during the purchase.

I would be more worried about the dealership reporting you for a suspicious financial transaction. Buying cars to launder money is a big deal and states have all kinds of reporting laws for that. Unless this "relative" is in your immediate family, it is going to send up a red flag.

suezyque said:   This thread and the OP are BS.
OK, it was my GF! LOL

BondGamer said:   Next topic by OP: "My girlfriend didn't love me, how do I get my car back?"
I drew the line when she next asked for a condo.

jkimcpa said:   Why'd you give her title vs just letting her drive your car?
Liability reasons in case of accidents, etc.

A dealership helped you with DMV paperwork to do a subsequent transfer AFTER you purchased the car and they submitted the paperwork to DMV?

BS.

BrunoB said:   jkimcpa said:   Why'd you give her title vs just letting her drive your car?
Liability reasons in case of accidents, etc.

Call the insurance company add her as a regular authorized driver.

You should do the same thing If you have a roommate or any other person who regularly uses your car.

BEEFjerKAY said:   skansiewicz said:   Call the insurance company add her as a regular authorized driver.

You should do the same thing If you have a roommate or any other person who regularly uses your car.

No. Actually you should tell your roommate you'll cut his nuts off if he touches your car.

The last thing you need is to have a claim on your insurance due to some goofball roommate.

The second worst thing you need is to have your insurance rates jacked up because your goofball roommate has a crappy credit score or driving record.

edit: If necessary, do the above while sharpening a large knife and idly musing about how thankful you were when your attorney was able to get them to accept anger management sessions in exchange for removing the arrest from your record.
You xeroxed my mind! LOL