Taxed Twice on Vehicle

This is a discussion on Taxed Twice on Vehicle within the Off Topic & Humor Discussion forums, part of the The Back Porch category; Mods, I'm not sure if this is the right place - please move or delete if necessary. Here is the situation: Friend A won a ...

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Thread: Taxed Twice on Vehicle

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    Member Array erick619's Avatar
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    Taxed Twice on Vehicle

    Mods, I'm not sure if this is the right place - please move or delete if necessary.

    Here is the situation: Friend A won a car on the TV game show The Price Is Right. It is a 2013 Honda Accord valued at ~$25,000. Friend A wants to sell it to Friend B for $20,000. Friend A paid the sales tax when he picked up the car at the delearship and he now owns the vehicle with the pink slip in hand. Now that Friend B is about to buy the vehicle, the bank wants the bill of sale and CA DMV records of the sale to complete the loan. This means that Friend B will have to pay taxes again for the same vehicle that's not even a few weeks old. Is there any exemption that anyone is aware of to avoid paying taxes twice? Thanks!
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    VIP Member Array Crowman's Avatar
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    Its called the tax man always gets ya......
    thephanatik likes this.
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    Member Array 91wm6's Avatar
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    The vehicle is being sold/purchased twice. Uncle Sam wants his cut of both sales, pretty simple...
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    Senior Member Array KyBill's Avatar
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    Pretty much the way it works around here. When you make a purchase you pay sales tax. If friend "B" sells the vehicle to someone else, they too will pay sales tax. Etc etc.

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    VIP Member Array NONAME762's Avatar
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    Not only that but regardless of the sales price you can count on the state taxing the auto for the blue book value. That's how it's done in WA state now. The only way to beat the sales tax is to gift it to someone.
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    Member Array thephanatik's Avatar
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    I don't think there's a way to get around it without it being considered tax fraud.

    Well now you got me worrying about another potentially bad outcome of universal background checks.
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    VIP Member Array NONAME762's Avatar
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    Quote Originally Posted by thephanatik View Post
    I don't think there's a way to get around it without it being considered tax fraud.

    Well now you got me worrying about another potentially bad outcome of universal background checks.
    Well...clue us all in for Heavens sake!
    Firing a suppressed is on my Bucket List.

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    Member Array thephanatik's Avatar
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    Quote Originally Posted by NONAME762 View Post
    Well...clue us all in for Heavens sake!
    Putting in place a background check system/gun registration so they can start taxing private sales of guns. The anti-gunners keep comparing it to registering a car.
    Your number one Option for Personal Security is a lifelong commitment to avoidance, deterrence, and de-escalation. - Rule #23 in the USMC rules for gunfighting.

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    Member Array erick619's Avatar
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    Thanks for everyone's input. That's what I thought - taxing us to no end! thephanatik, you bring up a good (scary, but good) point. Hopefully it will never come to that.
    I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend.

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    In addition to the sales taxes, Friend A will have to pay state, federal and possibly local income tax on the value of the car.

    Friend B will only have to pay sales taxes on the price he pays.

    You don't have to like it, but you do have to pay it.
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    Distinguished Member Array onacoma's Avatar
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    Quote Originally Posted by ksholder View Post
    In addition to the sales taxes, Friend A will have to pay state, federal and possibly local income tax on the value of the car.

    Friend B will only have to pay sales taxes on the price he pays.

    You don't have to like it, but you do have to pay it.
    Here in Nevada, on a used vehicle there is no sales tax! I don't know if Texas has sales tax on used vehicles?

    I'm surprised Friend A didn't get a 1099 for the $25 K?


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    Distinguished Member Array phreddy's Avatar
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    Quote Originally Posted by onacoma View Post
    I'm surprised Friend A didn't get a 1099 for the $25 K?
    He will and he should include the value of the vehicle in his taxable income for the year in which he won the car. I believe there is a way to lower the taxable value to what he sold the car for though if he sold it within the allowed time frame.

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