My father is 87 and I would like to give my car to him because I don't think what he drives is reliable enough. The car is probably worth in the $15000 range. How would that work from a tax standpoint? What about from the car title standpoint? Auto insurance standpoint? Anything else worth noting to accomplish that?What is involved in giving a car to your parent?
This is usually a state by state issue, but i will try.
If you are giving him a car worth 15K and taking his old one, you pay tax on the diff. (in my state)
You can be generous in the value to get the least tax.
Say it's not worth more than $500, but one that is identical in excellent condition is 1500.
Print off the KBB, show the diff. but be careful how you fill out the title.
My state is anal about filling out correctly. Even if you forget (or add) a middle initial to the names.
Hope this helps a little.What is involved in giving a car to your parent?
I think it is wonderful that you want to give you parent something reliable. .Are you asking if you can us it as a tax deduction? I'm not sure if that would be considered a charitable donation or not. My goodness, couldn't you get give it to him without thinking about your lose. ., after all, he is your father. . At his age, the car title would be best if it was left in your name. Why go through all the paper work, unless he insists you sign it over to him, I would leave it alone..I would also leave the insurance in my name and just put him down as one of the drivers. when the insurance is due, I'm sure you father will pay it. . .It would be simple to just give him the car and that would be a wonderful gesture on your part...If only everyone loved that Dad as much as you. . .I did....My dad passed on May '07 and I miss him soo much. . .Thanks for taking care of your daddy. . .
From a tax standpoint do you mean yours? I don't think you have one-it's not a charitable donation. Transfer the title with a price of $1 listed so dad won't have big taxes to pay. Insurance from his current vehicle should be transferable, though the premium may increase if it's a better car.
Check with the DMV. In Illinois (10 years ago anyway) you can make a 1-time donation of anything you want to anyone you want with no tax liability for either party as long as the value of the item was below $10,000. I'm sure this has changed, but check first.
If you keep the car in your name it might help down the road when your father passes. If there are any estate problems, the vehicle will not get caught up in probate and you will retain possesion.
Can't you just leave the car on your name ?!
Is it too much for you to pay the taxes yourself ?
Does your father want your car? Old people have the tendency not to let go easily to what they have even if that makes their life a mess. I guess your father will embrace the idea if you'll say it's a gift in every sense...
First you would have to sign your title like you were selling it to your father. You would have to go to the bmv and transfer the title, registration, and get new plates for the vehicle. When you do this, you can cancel your insurance on the car, and get insurance on it in your father's name (through his company). If you would like, you could put the selling price at $0, and then your father would not have to pay additional taxes on it at the bmv.
Best bet is to list the sale price at $1000, pay the tax on this. If you list at $1, they will question it, and may try to asses the full value of the car, tax would then be ~1k.