Help Yi Buy a Car

[The Brain]

Gift tax.

[alfred russel]

Hey Fredo, toss me some accounting expertise.  If my mom pays the seller directly can we duck the gift tax?

Took a look at the used Mercs and Jeeps available at local dealers online.  Pretty punky selection.  And I don't get why the Jeep mother page says the Sport starts at 23 and the dealerships are listing one and two year old cars for 30+.

I'm a CPA, but know jack shit about taxes (I do financial reporting). So what I know about tax is from taking a couple classes in school.

That said, unless it is her car that she is going to let you drive, the answer will probably be no. She would be gifting you a car versus the money for the car, and at the point of sale they would have the same value.

That said, I think there is a lifetime exclusion for the gift tax that has a really high (multimillion dollar) value. So unless your mom is going to leave a massive estate, whether she goes over the annual limit really shouldn't result in either her or her estate paying more tax. It may just be an extra tax form.

[viper37]

Somebody leases a car for 3 years.  Then they turn it in for another car.  The dealer sells it.  It's a used car, but they're usually in much better shape due to the mileage restrictions (10k to 12k or so a year) and people usually take much better care of them.

So like a certified pre-owned blah blah blah? Sure I could go for that.

yeah, it's often like that.  The dealer takes it, does an inspection, certifies it has had no accidents, makes some cosmetic repairs and seels it for a 40-60% discount to the original price 3 years ago.

Just make sure you look at the car at daylight, you inspect it very closely for scratch marks on the wheels or body and have someone take a look at the breaks and tires.

[viper37]

Hey Fredo, toss me some accounting expertise.  If my mom pays the seller directly can we duck the gift tax?

Wait until Trump's tax reform, there will be no more taxes.  For anyone gifting 1 billion or more.

The way I would do it is have my mother buy the car, put it in her name, insure the car for you as primary driver and her as secondary.  You pay for her insurance, you run the car.  In a couple of years, once the car has depreciated enough, she can gift it to you.  Even if it goes a bit above the limit, you'd escape most of the tax then.

[crazy canuck]

What our good friend Yi should do is just own the mid-life crisis and buy a Mustang or Camaro.  Put some snow ties on the thing and it'll be passable for winter driving.

  yeah, it'll be passable alright.  As all the 4x4s pass it when it's in a ditch.

At least he will have a cool looking cast somewhere on his body.

[viper37]

What our good friend Yi should do is just own the mid-life crisis and buy a Mustang or Camaro.  Put some snow ties on the thing and it'll be passable for winter driving.

  yeah, it'll be passable alright.  As all the 4x4s pass it when it's in a ditch.

THey're not ideal, I would certainly recommend against it, but people in 4x4 often are overconfident, and that leads them in the ditch, while the guy in the Camaro pass by them.

Also, winter tires in the correct sizes for Camaros and Mustang are pretty hard to come buy.  There used to be like one brand of winter tires for my Camaro.

[Tonitrus]

That said, I think there is a lifetime exclusion for the gift tax that has a really high (multimillion dollar) value. So unless your mom is going to leave a massive estate, whether she goes over the annual limit really shouldn't result in either her or her estate paying more tax. It may just be an extra tax form.

This.  The annual exemption is $14K (meaning under this = no paperwork).  Any amount over, is theoretically subject to the gift tax. 

In reality, as AR said, the amount over just hits on a lifetime limit that most non-millionaires will never get close to touching.  Going over the $14K just means you that do have to file a silly IRS form, but not actually pay any "tax".

[CountDeMoney]

THey're not ideal, I would certainly recommend against it, but people in 4x4 often are overconfident, and that leads them in the ditch, while the guy in the Camaro pass by them.

Yes, we call those people "women."

[Admiral Yi]

This.  The annual exemption is $14K (meaning under this = no paperwork).  Any amount over, is theoretically subject to the gift tax. 

In reality, as AR said, the amount over just hits on a lifetime limit that most non-millionaires will never get close to touching.  Going over the $14K just means you that do have to file a silly IRS form, but not actually pay any "tax".

Mucho helpful!

[Ed Anger]

I've enjoyed my Jeep Grand Cherokees over the years. Sure, one of them had its transmission go kaput but still, I like em.

[Syt]

I've enjoyed my Jeep Grand Cherokees over the years. Sure, one of them had its transmission go kaput but still, I like em.

We drove a Grand Cherokee home from Switzerland yesterday. The car hit 9999km when we arrived, so it's pretty new for a rental. Nice car. Loaded with 4 passengers and luggage, made it easily to 160-170 kph on the highway while remaining calm and easy to handle; no sluggishness, no jitters.

[Berkut]

Other than the fact that they are some of the most unreliable cars built on the planet today, Jeeps are OSSUM!

[DGuller]

I've enjoyed my Jeep Grand Cherokees over the years. Sure, one of them had its transmission go kaput but still, I like em.

We drove a Grand Cherokee home from Switzerland yesterday. The car hit 9999km when we arrived, so it's pretty new for a rental. Nice car. Loaded with 4 passengers and luggage, made it easily to 160-170 kph on the highway while remaining calm and easy to handle; no sluggishness, no jitters.

Not sure I'd want to go 100 mph in a Jeep.

[Barrister]

Re gift taxes... can you buy it and put it in both yours and her name, which should then pass solely to you on her passing?

[Admiral Yi]

This.  The annual exemption is $14K (meaning under this = no paperwork).  Any amount over, is theoretically subject to the gift tax. 

In reality, as AR said, the amount over just hits on a lifetime limit that most non-millionaires will never get close to touching.  Going over the $14K just means you that do have to file a silly IRS form, but not actually pay any "tax".

Thought about this some more, and not sure it makes sense.  Are you saying someone could give me ONE MILLION dollars, I fill out a form that says it's really 14K for this year, 14K for next year, etc., etc., and I don't have to pay any income tax on that?