Sell a car in TX under KBB value?

[phdhorn 6224]

We want to essentially "give" an old Saturn (MIL's car, too old to drive) to my long-time mechanic in gratitude for years of bargain service.  It's a 2004 Saturn VUE with 184K on it.  The car is what you'd expect, kinda run down... A/C needs work, tranny is getting old, lots of cosmetic blech, etc.  Essentially it's a "runs good" car or think of the one that his buddies got Will Hunting in the movie.  He will either make that his "new" Saturn (he drives an identical one) or use it for parts.

KBB value for this car averages about $1,500.  I don't want to do the fraudulent thing of putting like $100 on the U-130 (I actually want to charge him nothing).  I'm willing to put the "real" price on it and pay the tax accordingly (of course that's the big beef by DPS/county for "underselling"  a car - they don't get their tax bite).  I'm fine with that part, whatever.  So what I want to do is put say $1,500 as the price, get charged the tax, but not charge the guy anything.  I suppose this is still a no-no(?) but don't see the harm - the taxers get their chunk and the guy gets his car (he's not swimming in $$ obviously).  I can't gift it to him as far as I can tell (non-relative or charity).

Have you/would you do this to allow a guy a decent car without charging him (IMHO) way, way too much for this thing?  I'm not interested in making any $ off of this, just helping him.  What say you?

Thanks!

(P.S. I do have a 2016 Honda Accord in great shape I am selling, manual transmission, let me know if you'd care to know more about that).

Edited October 16, 2020 by phdhorn

[Hank Scorpio 17731]

You must really hate that mechanic. 

[ztejas 43744]

Could you not just Google this?

Gifts and inheritances

The process of gifting a car (or donating one) is the same as outlined above. It will require the same forms and transfer fees. However, instead of the standard taxes, the recipient will have to pay a $10 gift tax. They will also need to complete the Affidavit of Motor Vehicle Gift Transfer.

The process of inheriting a vehicle is a little more complicated. If there is a will, then the vehicle is part of the probate process and will be disbursed as the executor sees fit. If there is no will, the surviving spouse (or other qualifying heir) can complete the Affidavit of Heirship for a Motor Vehicle.

For more information on how to transfer a car title in Texas, see the state’s DMV website.

https://www.yourmechanic.com/article/how-to-transfer-a-car-title-in-texas-by-valerie-mellema

You could also just give it to him and keep the title in your name.

Edited October 16, 2020 by ztejas

[phdhorn 6224]

Yes, I could have.  And have/  And have gifted cars to my kids 2 times.  There are restrictions on who can be gifted a car (which is not in the information here) and apparently they cracked down on this some years ago because so many people were "underselling" cars by gifting them.  So as far as I can tell, this guy is not an eligible recipient for a gifted car from me.  You read that and think, "well it's a no brainer, just sell the car for essentially $10." But you can't just do that for anyone.  Only relatives or charities.  If this is incorrect, then it's poorly described.  To my knowledge, relatives and charities.
From Form 130-U:
 

Quote

• A $10 gift tax is due when a person receives a motor vehicle as a gift from an immediate family member, guardian, or a decedent's estate. A vehicle donated to, or given by, a non-profit service organization qualifying under IRC 501(c)(3) is also taxed as a gift. Both donor and recipient must sign the Comptroller's joint affidavit, Affidavit of Motor Vehicle Gift Transfer (Form 14-317). The affidavit and the title application must be submitted in person by either the donor or recipient.

Leaving the car in my MIL's (not my) name is risky at best.  He would never pass along expenses, but no way I'm leaving her responsible for anything that happens with this car.

50 minutes ago, Hank Scorpio said:

You must really hate that mechanic. 

And, lol, leave it to the Sur to piss on charitable acts.  Wouldn't be this place without it.

Edited October 16, 2020 by phdhorn

[blacklab 11994]

The state actually has a table of what they think the car is worth. When I bought my 97 4runner last year I paid $4000 but the lady at the dmv looked it up and it said it's $2000 so we'll tax you on that. An old saturn is probably close to $10 in their database. 

[WithoutAClue 15559]

https://www.txdmv.gov/standard-presumptive-calculator 

try this calculator to see what the State of Texas thinks your car is worth

[ztejas 43744]

48 minutes ago, phdhorn said:

Leaving the car in my MIL's (not my) name is risky at best. 

Ah, okay. That makes more sense then. Because if it was in your name I'd probably just hand him the keys.

[woohorn 1131]

We can read between the lines. I don't think there is a "clean" way to pay this guy off, but there is a recent case study about how NOT to do it. Look up "Giancarlo Granda".

[davidg 4040]

32 minutes ago, WithoutAClue said:

https://www.txdmv.gov/standard-presumptive-calculator 

try this calculator to see what the State of Texas thinks your car is worth

Use this and put the value on the form. It will be lower than KBB.

 

if you put anything lower than that value the state will change it to that number when he goes to register

Edited October 16, 2020 by davidg

[phdhorn 6224]

1 hour ago, blacklab said:

The state actually has a table of what they think the car is worth. When I bought my 97 4runner last year I paid $4000 but the lady at the dmv looked it up and it said it's $2000 so we'll tax you on that. An old saturn is probably close to $10 in their database. 

Appreciated.  1 beer or 10 Ameros owed.

31 minutes ago, WithoutAClue said:

https://www.txdmv.gov/standard-presumptive-calculator 

try this calculator to see what the State of Texas thinks your car is worth

Ahh, great!  Thanks!  Same beer/Amero.
$825 from the State vs. $1,200 (avg.) KBB... I'll take it.  50 bucks tax.

Thanks for the help, we're giving the car to him today.  And in good Surly form, yeah it would be really cool if it exploded with him in it, but I doubt that's gonna happen.
 

[phdhorn 6224]

BTW, this guy will either have that "old piece of shit" Indy-worthy within a week, or he'll use it for parts (most likely).   He's saved me easily over $10,000 repairs and kept one of my cars (Explorer used for hauling illegal immigrants and corpses mostly now) going at 300K.  And he wants the Saturn.  Tou-che.

[dirtonia 269]

Race him for pinks and just throw the race.

[rage-a-holic 4548]

4 hours ago, WithoutAClue said:

https://www.txdmv.gov/standard-presumptive-calculator 

try this calculator to see what the State of Texas thinks your car is worth

Damn, wish I'd seen that last month. I used the lowest BB value as my purchase price and the DMV value is less than half of that.