Buy Here Pay Here Car Dealers in Akron Ohio
When you purchase a new or used car, you will usually pay sales tax. However, the government will not ask you to pay this tax if you received the vehicle as a gift. You generally won't pay any gift tax, either. The donor, not the recipient, is reponsible for paying gift tax where the value of the gift exceeds a certain value. If the donor stays below the annual exclusion threshold, there should be no tax to pay at all.
Do I Have to Pay Tax on a Car That Is a Gift in Ohio
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What the Law Says About Sales Tax
By Ohio tax law, gift recipients do not have to pay sales tax on the value of their vehicles. Federal tax law exempts recipients from paying taxes on their gifted vehicles as well, which is good news if you've received a gifted car. Bear in mind that you will still have to pay the applicable title and registration fees. Fees depend on the type of vehicle; you'll find the current fee schedule posted on Ohio's Bureau of Motor Vehicle's website.
How to Transfer Title
The process of obtaining a title for your gifted vehicle is very similar to the process of transferring any vehicle's title. You must appear before a notary public with the previous owner to sign and date the title. The owner will also give you the bill of sale at this time, which should indicate that the vehicle was a gift. Once you have all of the necessary documents, you can take them to the County clerk of courts and apply for a title. The fee for a new title is currently $15. Ownership stays with the donor until you have completed all these steps.
Donor May be Hit With Gift Tax
As a recipient, you will not pay taxes on a gifted vehicle. However, the person who gave it to you might have to pay gift taxes to the federal government. It depends on the value of the car and whether the donor has given you other gifts during the year. As of 2018, individuals will pay a federal gift tax if the total value of gifts to a single recipient exceeds $15,000. A married couple can give twice as much — they only pay taxes if the value of gifts to a recipient exceeds $30,000 per year. So, if the car is worth $10,000, and the donor hasn't given you any other gifts this year, then there's no tax to pay. In certain circumstances, you may be able to arrange to pay the tax yourself. This is a bit complicated, though, so you'll want to speak to a tax professional.
If you received the car as part of a promotion, for example, the car company was giving away cars and other swag to publicize its brand, then the tax man does not count it as a gift. Unfortunately, this means the tax burden falls on you. You'd have to report the "gift" to the Internal Revenue Service on your tax return and pay the appropriate tax on it, based on the vehicle's fair market value.
Buy Here Pay Here Car Dealers in Akron Ohio
Source: https://www.sapling.com/8594197/do-tax-car-gift-ohio
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