In post #5944 I said about IN and OUT'S....." A friend did it recently when he sold his '98 Lexus ES300 to a co-worker for a new 2002 Mercedes C240. The Mercedes dealer had no problems at all doing it and charged a small fee of about $200 for the paperwork."
I talked to my friend last night about this and he said that he DID'T do it because the dealer didn't want to. I remember when he made this transaction and he told this BIG story on how it took place. He ended up getting a little more for his car to off-set the taxes on the new one.
So, this updated information and .25 cents will get you absolutely nothing! LOL
Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
Sorry, I must have missed it, exactly how is that now you're in a position to ridicule my profession??? Quite frankly, if your "engineering degree" hasn't provided you with a solid grounding in logical thinking, you were short changed my friend.
You said, " ...you don't understand simple logic like action "a" is bad for business and people don't want to do it"
As it appears you didn't absorb my previous couple of posts, I'll clarify. I believe I clearly stated my acceptance of the premise, as put forth by the sales experts here, that there might be no monetary reason to do any type of in-and-out transaction. And what other reason could their possibly be?... oops, there's that logic thing again.
You might want to refer to the post where I stated, "You guys say there is no upside. Fair enough. You know your business better then I do.", followed by "If all things considered, you still choose not to do it, whether it's due to extra paperwork hassle, or too mini of a deal... that's cool.". Hopefully, this clears things up for you.
I did say "no offense" and certainly meant no harm - I simply understand how people with engineering backgrounds seem to over-analyze things, myself included. An engineering education, in some ways, did me more harm than good, simply because I can't see the forest for the trees sometimes - I'm too busy calculating the internal mass on each tree.
The in and out issue? It's not only illegal in states that offer tax credit on trades, it's bad business for the dealer for other reasons, as well.
to all you car biz folk who are unwilling to promote tax fraud. Changing the subject, what do you think of a dealer who advertises a Belchfire at the never before discount of $10,000 and then in the very teeny tiny print at the bottom has "only 6275 executive miles"? Do you think that this is a sound business practice for a place that is trying to retail $60,000 automobiles?
Fair enough. However, IMO, being concerned with details doesn't translate into missing the overall concepts being espoused. It doesn't do much good to design the perfect sunlamp for the desert, if you know what I mean. It's more that, sometimes, the short answer isn't nearly enough.
What about all those discussions where we agreed that the best way to get the best price for your used car is to sell it privately? Isn't that why we have a "Real World Trade In Values" board?
If you want to sell your used car to a friend for less than market value, go for it. Why drag the dealer into it? Oh, that's right, so you can save money on sales tax -- in those cases where you happen to live in a state where the tax benefit is available! And how many states would that be?
I guess I've never lived in a state that offers the tax benefits of trading in cars (or, I've been too naive to notice that it was being done). In the past, I've done both --- sold privately before buying and traded in.
Bottom line -- the horse is dead. Quit beating it.
When it came time to trade in my '93 Mazda, my girlfriend and I visited the dealer twice and haggled with the dealer for hours--to no avail.
About three weeks later, the dealer called me back and made me an offer that I couldn't refuse--he offered me about $1,000 more than I reasonably expected for my trade and gave me a great price on the new car--I couldn't believe it! Naturally, I ran down to the dealer and bought the car. In fact, I got there sooner than the dealer expected and he hadn't had time to add the window tint. So, he gave me the new car and promised to do the tint the following day.
When I arrived the next afternoon, I looked around the lot but didn't see my old car--it had already been sold. So, I asked the salesman what happened to it. I couldn't believe what he told me...Apparently, my EX-girlfriend had called the salesman to inquire whether I had traded in my Mazda. He advised her that we hadn't reached a deal "yet". She told the dealer that she would buy my Mazda from him if I eventually traded it in. Apparently, she was so pissed about our break-up (it was ugly) that she was willing to pay the dealer more for the car than she would have had to pay me. (Did I mention it was an ugly break-up?)
Anyway, I ended up getting a great deal on the car I really wanted while she paid about $2000 more than she should have. Talk about "cutting off your nose to spite your face"! It's bad enough she was going to be driving around in her ex-boyfriend's old car, but to pay a $2000 premium for the privilege is insane!
What determines the number of vehicles the manufacturer sends you? Will they send you all you can sell or just a predetermined allotment? The reason I ask is this. In late December I plan to order a new car and I'm very interested in the upcoming tundra doublecab and the new sienna. I am not however, crazy about paying full MSRP (imagine that). Given the demand for these vehicles Is there a limit to the number any dealer can get? What I'm saying is, if a dealer makes me a better deal than full sticker is that just one additional sell for him or is it a loss for him as it replaces one of a predetermined allocation he could of sold at MSRP? I could understand a dealer turning down a less than full price offer in the latter case. Otherwise, if he can order as many as he can sell I think I will eventually find a dealership willing to "deal".
Not one person has adressed the issue how it's different from a quick resale. At least not in a way that I can understand.
But all the guys who're in the business say it's illegal.
So I'm guessing it depends on what's in the dealer's mind at the time of the sale -- that's not a ridiculous concept, that's the law in many cases. Shoot a corpse you THINK is alive and it's murder, at least as far as I know.
The reason I believe "it's illegal" is because I believe the guys who're saying it. Not because I really understand it. It has very little to do with logic and engineering degrees and all that. So please don't go saying "you don't understand 'cuz you're not in the business". That's just silly. Dick Feynman once said "What one fool can do, another fool can do." And he meant it, even though he was talking about quantum electrodynamics at the time (which I CAN'T do). So if you 'splain it right to us, we amateurs will likely get it.
It's probably also a little like why I will do anything to avoid an audit.. my wife is an antiques dealer with so much merchandise going through, that if we ever get audited, we'll likely come out ahead.. but we'll work for a month just to get things in order. ANYTHING but that.
If I were a dealer, I certainly would not do a pass-thru. Why get in the middle of a deal with a car you want nothing to do with? All the hassle and responsibility, no or little profit? No thanks.
As far as "illegal", "shady", "immoral".. I dunno guys. Ever use a home equity loan to pay for a car and then deduct income tax? I have. Not what the law was meant for... but is it illegal? shady? immoral? If it is, what about a cash-out refi? Now is it OK...? I see a lot of grey in all this.
The car gets taken in from you as the buyer of the new car and trader of the used car. The used car goes through the shop and gets put on the line. Joe Smith comes along and buys it and gets charged $XXXX for it and pays $XXX in state sales tax. Done.
The other way, the dealer misleads the state into think the same transaction happened, except it didn't. A decent auditor would see right through it.
A little bit of apples and oranges on the deducting of interest on a refi/ home equity loan and an in and out. The rules on what you can and can't deduct are spelled out ad nauseum in the Federal regulations. The in and out can be gray ( I'm obviously not a dealer so I don't know state tax laws)but in this instance the interest deduction off the money you borrowed against the equity in your home is pretty clear cut. Just my .02 :-)
I work for a Chevrolet/Ford/Chrysler/Jeep/Mitz/VW group, not Toyota but the basics of an answer for kcflyer is "turn and earn". Sell 10 units this year and get 11-12 next year. The manufacturer is often more interested in the trade-in brand (conquest sales!) than the dealers profit. Holding out for 10 full MSRP sales might be great this year but only if all stores only get 10 to sell. In some cases selling more of a distressed model will get you more of a popular one.
I was wondering if family owned dealerships were becoming a thing of the past? Will major chains such as AutoNation rule? Several long time family owned dealerships in the San Jose area have been sold to chains after the husband has passed away. Does it matter to consumers or employees or is it merely nostalgia? Thanks.
...but companies like Group 1 that owns one of the largest dealer groups in MA seem to do it right. They leave local management in place and let them operate according to the local market.
I know the dealer group they own here still has the family running it and there isn't a mention of Group 1 anywhere on their website.
Here in Denver, we have a few "independant", or family owned, dealerships. Most, though, are owned by:
--> AutoNation (under John Elway brand name) --> Burt (largest Hispanic owned company in the country, IIRC) --> Lithia --> Phil Long (dealerships in Denver and Co. Spgs.)
There are a few that own 2-4 different dealerships in the area, too.
I guess some people feel that a family owned dealership gives them the opportunity to shake hands with the owner over coffee at the local diner and that somehow makes it a better place to do business.
The dealer may give the impression of being local owned but they could be part of Giganto Corp. It's all in how the business is run.
I followed the in and out thread and then ran across this post today, where it seems that two dealers did a form of in and out to save a buyer some tax money. The details aren't real clear to me:
Not to quibble with detail, but shooting a dead person is not in fact "murder", regardless of intent. Under common law, intent can be grounds for a finding of murder (versus manslaughter or otherwise), but by itself is insufficient to qualify the charge. There is an interesting Bar exam type question where one could argue that it was attempted murder, but the applicability is still untested as far as I know (by the way, even if intent was sufficient to qualify the act for a murder charge, one could always argue that the wound inflicted could be insufficient to kill, thus rendering the max charge attempted murder, and hence the bar exam question).
I can't argue with certainty, but my understanding (and the opinion of a lawyer colleague) is that absent a law against presales for a dealership, a pass-through as described here would likely be legal but arguably unethical. As long as the procedure was valid and consistent with the trade-in sales tax waiver, the deduction is allowable without regard to whether or not the car is going to be immediately resold to a party that the dealer didn't bring in through normal sales channels.
Various state revenue boards can, and have, argued in favor of collection, but have rarely been upheld when challenged in court. The distinction is actually exactly what some people have mentioned, tax avoidance versus evasion, and the courts have judged that if the procedure is consistent with the law, the transaction is an allowable shelter.
Having said that, I can't imagine why a dealer would be silly enough to do one of these transactions. As many people have said, the transaction turns the dealer into a principal in the transaction, and unless he gets compensated for assuming the risk (both liability and audit - the state can demand the money after all, even if they're unlikely to get it if taken to court), it just doesn't make sense to me. If the pot is big enough, maybe there's room for everyone involved to end up ahead, but int he "average" case we seem to be talking about, I'd think it's better just to say no and let a less wise dealer take the risk.
Actually, there's caselaw on the famous "if you shoot someone, but it turns out he was already dead, is it murder?" law school hypo. People v. Dlugash (1977). According to the New York Court of Appeals, it's not murder, but attempted murder. You're clearly not guilty of killing him, but you are guilty of trying.
My sister is a tax collection agent for a state Attorney General's office. I won't say which state so that I don't scare anyone (NOT my home state). On a daily basis, she sees some of the all-time dumbest excuses for attempting to defeat taxes. She and the other agents in her office are pros at this (my sister has 15+ years of collection experience, both bank credit and tax), and they have yet to be fooled by anyone.
For those who are still a little confused about the math and how the state would be defrauded on an in-and-out where the owner of the used car brings someone to buy it from the dealer, here's where the state loses:
1. Used car owner sells car A directly to friend for $10000. Friend pays 8 percent ($800) sales tax to state. Used car owner then buys new car from dealer for $24,000 using the $10K cash as down payment and pays $1920 to state in tax. Total collection for state = $2720.
2. Used car owner arranges in-and-out at dealer with same cars, same prices, same people. Friend still pays $800, but because of the "trade", the new car is only taxed on $14,000, and thus the state only gets $1120 for a net tax collection of $1920. State loses $800 in tax revenue with the in-and-out.
As the dealer professionals have stated, this will be picked up by a tax auditor because of the time-frame and parameters of the transactions. THAT is why it's tax fraud - as scipio1 mentions, not illegal to the letter of the law, but the fact that the dealership did not have time to re-title the car and did not change the price from the trade value, they would likely be required to prove this was not intent to defraud or to aid in fraud.
The illegality is the intent, not the actual transaction. Same as if, after a car accident, you continued to see a chiropractor long after treatment became ineffective so that the doctor could continue to collect the insurance payments. It's not illegal to see a doctor, but the intent to milk the insurance is illegal.
Thanks for the clear example, I now understand what all the fuss has been about these last few days. The only problem I have with it is that the state gets to collect tax on the $10K paid for the used car twice. As I see it the state was never entitled to that money in the first place, but who ever said that the law had to make sense?
That's the sound of all this tax talk flying over my head.
I wouldn't know what to do if cars where taxed, I've never paid tax on any car purchase. For the moment Alaska does not have a state sales tax, state income tax, and where I live we don't pay property tax.
Wow, starting to think its a good thing I live in Alaska.
Still seems to me that the tax treatment SHOULD be similar for a purchase+private sale or a purchase+trade-in. Thinking about it, though, enforcement would probably be a royal pain. You buy a car for $20k, dealer collects $1k in sales tax (here in MA). You then sell your current car privately for $10k, and apply to the state to get your $500 tax credit? Doable, but a bit cumbersome.
Yeah we do, but I have a feeling that's about to end, its either they end that or start a sales tax, not sure which they will do. Oil is dwindling and the state deficit is growing.
robr2.......I don't go to the car lots much anymore, we drove through the Dodge dealer yesterday just to *look*, hubby wanted to take a peek at the new cummins. He's looking at next fall for buying one, we were in and out in a flash no salesman bothered us or anything.
"As the dealer professionals have stated, this will be picked up by a tax auditor because of the time-frame and parameters of the transactions."
I posted a real life example (post #6026) where my trade sold within hours of trade, and my trade was delivered to the new owner before I took delivery of my new car.
I asked the question in that post, "how does an auditor know this transaction is not an In/Out?" My question still stands.
Akangl, how much more time before "they" say Alaska runs out of oil? If I recall correctly, each person gets about $1,200 a year. I toured Alaska and the Yukon back in '97 by tour bus and then after arriving in Anchorage, took the cruise ship to Vancouver. You have an absolutely beautiful state. There is nothing like Chicken, Alaska, anywhere!
You guys should just buy a brand new top-of-the-line diesel truck and keep it as long as you can before it starts needing too much work (maybe 10 yrs?). Buy at the end of the year, get the "big" discount, and drive that baby!
Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
........ On a legit deal: the Dealer takes the trade-in, dealer sells that vehicle before that buyer receives his new vehicle (and this is common) .. at this point in time, the original contract shows 2 vehicles, the new one going out, the trade coming in .. full info, Vin #'s, miles, make and models, etc, etc .. at this time the original buyer gets the tax break on the difference (depending on the State) ....
The 2nd buyer buys the trade and pays taxes on the "selling" figure, in the meantime, the dealer get's the title either now, or after the pay-off from buyer #1, the title gets "flipped" over to the selling dealers name and at purchase, the 2nd buyer will get that title in his name and/or lender ...
I think where everyone is getting confused is .. if a dealer "allows" someone to bring their trade-in on the deal and then use it to offset the taxes ~ and then "allow" that buyer to take it home and sell it on his own ... if no taxes are being paid, then that's illegal .! - Period.! ... depending on the State, both the dealer and the "original" buyer are in for potential fraud AND Tax evasion, "avoidance" has nothing to do with it .l.o.l...
The reason why dealers don't do it is, as a rule (if there is one), the State would rather pursue the dealer, *it's a business* and it must *conform to all the tax laws in the State ~ the original customer can say - "Hey, I didn't know" "they told me it's done everyday" "I had no Idea, what would I know, I'm not in the business", etc, etc.com.
To answer your question, how will they know .?
Easy .. how many titles came in, and how many vehicles went out and what taxes were paid, takes them "oooh" about 15 minutes on a hand calculator ...
Alangl, you each get $1,100 right? On the trip I took they pointed out one small tent-house where the family basically lives on the yearly draw. They had 7 children that each got the oil money. So, they lived rather meagerly on that money.
Also, what is the name that "Alaskians" call the locals who have been there a while?
A friend of mine and her family run a B and B in Skagway..... another nice town.
Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
Comments
I talked to my friend last night about this and he said that he DID'T do it because the dealer didn't want to. I remember when he made this transaction and he told this BIG story on how it took place. He ended up getting a little more for his car to off-set the taxes on the new one.
So, this updated information and .25 cents will get you absolutely nothing! LOL
Mark
You said, " ...you don't understand simple logic like action "a" is bad for business and people don't want to do it"
As it appears you didn't absorb my previous couple of posts, I'll clarify. I believe I clearly stated my acceptance of the premise, as put forth by the sales experts here, that there might be no monetary reason to do any type of in-and-out transaction. And what other reason could their possibly be?... oops, there's that logic thing again.
You might want to refer to the post where I stated, "You guys say there is no upside. Fair enough. You know your business better then I do.", followed by "If all things considered, you still choose not to do it, whether it's due to extra paperwork hassle, or too mini of a deal... that's cool.". Hopefully, this clears things up for you.
The in and out issue? It's not only illegal in states that offer tax credit on trades, it's bad business for the dealer for other reasons, as well.
That 6200 mile car is already written down by their accounting department - probably $3-4K.
If you want to sell your used car to a friend for less than market value, go for it. Why drag the dealer into it? Oh, that's right, so you can save money on sales tax -- in those cases where you happen to live in a state where the tax benefit is available! And how many states would that be?
I guess I've never lived in a state that offers the tax benefits of trading in cars (or, I've been too naive to notice that it was being done). In the past, I've done both --- sold privately before buying and traded in.
Bottom line -- the horse is dead. Quit beating it.
About three weeks later, the dealer called me back and made me an offer that I couldn't refuse--he offered me about $1,000 more than I reasonably expected for my trade and gave me a great price on the new car--I couldn't believe it! Naturally, I ran down to the dealer and bought the car. In fact, I got there sooner than the dealer expected and he hadn't had time to add the window tint. So, he gave me the new car and promised to do the tint the following day.
When I arrived the next afternoon, I looked around the lot but didn't see my old car--it had already been sold. So, I asked the salesman what happened to it. I couldn't believe what he told me...Apparently, my EX-girlfriend had called the salesman to inquire whether I had traded in my Mazda. He advised her that we hadn't reached a deal "yet". She told the dealer that she would buy my Mazda from him if I eventually traded it in. Apparently, she was so pissed about our break-up (it was ugly) that she was willing to pay the dealer more for the car than she would have had to pay me. (Did I mention it was an ugly break-up?)
Anyway, I ended up getting a great deal on the car I really wanted while she paid about $2000 more than she should have. Talk about "cutting off your nose to spite your face"! It's bad enough she was going to be driving around in her ex-boyfriend's old car, but to pay a $2000 premium for the privilege is insane!
That's just strange.
Hell hath no loopiness like a woman scorned I suppose.
Huh?
But all the guys who're in the business say it's illegal.
So I'm guessing it depends on what's in the dealer's mind at the time of the sale -- that's not a ridiculous concept, that's the law in many cases. Shoot a corpse you THINK is alive and it's murder, at least as far as I know.
The reason I believe "it's illegal" is because I believe the guys who're saying it. Not because I really understand it. It has very little to do with logic and engineering degrees and all that. So please don't go saying "you don't understand 'cuz you're not in the business". That's just silly. Dick Feynman once said "What one fool can do, another fool can do." And he meant it, even though he was talking about quantum electrodynamics at the time (which I CAN'T do). So if you 'splain it right to us, we amateurs will likely get it.
It's probably also a little like why I will do anything to avoid an audit.. my wife is an antiques dealer with so much merchandise going through, that if we ever get audited, we'll likely come out ahead.. but we'll work for a month just to get things in order. ANYTHING but that.
If I were a dealer, I certainly would not do a pass-thru. Why get in the middle of a deal with a car you want nothing to do with? All the hassle and responsibility, no or little profit? No thanks.
As far as "illegal", "shady", "immoral".. I dunno guys. Ever use a home equity loan to pay for a car and then deduct income tax? I have. Not what the law was meant for... but is it illegal? shady? immoral? If it is, what about a cash-out refi? Now is it OK...? I see a lot of grey in all this.
Peace!
-Mathias
The car gets taken in from you as the buyer of the new car and trader of the used car. The used car goes through the shop and gets put on the line. Joe Smith comes along and buys it and gets charged $XXXX for it and pays $XXX in state sales tax. Done.
The other way, the dealer misleads the state into think the same transaction happened, except it didn't. A decent auditor would see right through it.
So what matters is indeed what's in the dealer's mind at the time. Fair enough.
Thanks -M
Just my .02 :-)
Duncan
More and more, this isn't the case. It seems most stores are owned by large groups.
I know the dealer group they own here still has the family running it and there isn't a mention of Group 1 anywhere on their website.
Still, I like it the way we have it here.
--> AutoNation (under John Elway brand name)
--> Burt (largest Hispanic owned company in the country, IIRC)
--> Lithia
--> Phil Long (dealerships in Denver and Co. Spgs.)
There are a few that own 2-4 different dealerships in the area, too.
I guess some people feel that a family owned dealership gives them the opportunity to shake hands with the owner over coffee at the local diner and that somehow makes it a better place to do business.
The dealer may give the impression of being local owned but they could be part of Giganto Corp. It's all in how the business is run.
sueradu2 "Honda Pilot: Prices Paid & Buying Experience" Oct 30, 2003 7:09am
Just a point of interest; please don't relive every last nuance and get KC and Car_man mad at me for bringing it up :-)
Steve, not the Host here
I can't argue with certainty, but my understanding (and the opinion of a lawyer colleague) is that absent a law against presales for a dealership, a pass-through as described here would likely be legal but arguably unethical. As long as the procedure was valid and consistent with the trade-in sales tax waiver, the deduction is allowable without regard to whether or not the car is going to be immediately resold to a party that the dealer didn't bring in through normal sales channels.
Various state revenue boards can, and have, argued in favor of collection, but have rarely been upheld when challenged in court. The distinction is actually exactly what some people have mentioned, tax avoidance versus evasion, and the courts have judged that if the procedure is consistent with the law, the transaction is an allowable shelter.
Having said that, I can't imagine why a dealer would be silly enough to do one of these transactions. As many people have said, the transaction turns the dealer into a principal in the transaction, and unless he gets compensated for assuming the risk (both liability and audit - the state can demand the money after all, even if they're unlikely to get it if taken to court), it just doesn't make sense to me. If the pot is big enough, maybe there's room for everyone involved to end up ahead, but int he "average" case we seem to be talking about, I'd think it's better just to say no and let a less wise dealer take the risk.
Thanks for the analysis, Scip. You make perfect sense.
http://people.brandeis.edu/~teuber/puzz12.html
For those who are still a little confused about the math and how the state would be defrauded on an in-and-out where the owner of the used car brings someone to buy it from the dealer, here's where the state loses:
1. Used car owner sells car A directly to friend for $10000. Friend pays 8 percent ($800) sales tax to state. Used car owner then buys new car from dealer for $24,000 using the $10K cash as down payment and pays $1920 to state in tax. Total collection for state = $2720.
2. Used car owner arranges in-and-out at dealer with same cars, same prices, same people. Friend still pays $800, but because of the "trade", the new car is only taxed on $14,000, and thus the state only gets $1120 for a net tax collection of $1920. State loses $800 in tax revenue with the in-and-out.
As the dealer professionals have stated, this will be picked up by a tax auditor because of the time-frame and parameters of the transactions. THAT is why it's tax fraud - as scipio1 mentions, not illegal to the letter of the law, but the fact that the dealership did not have time to re-title the car and did not change the price from the trade value, they would likely be required to prove this was not intent to defraud or to aid in fraud.
The illegality is the intent, not the actual transaction. Same as if, after a car accident, you continued to see a chiropractor long after treatment became ineffective so that the doctor could continue to collect the insurance payments. It's not illegal to see a doctor, but the intent to milk the insurance is illegal.
kcram
Host
Smart Shopper and FWI Message Boards
They just don't collect $20K worth of tax each time.
It's the same with anything that's sold new or used, with some exceptions in some states for food and clothing items.
I wouldn't know what to do if cars where taxed, I've never paid tax on any car purchase. For the moment Alaska does not have a state sales tax, state income tax, and where I live we don't pay property tax.
Wow, starting to think its a good thing I live in Alaska.
robr2.......I don't go to the car lots much anymore, we drove through the Dodge dealer yesterday just to *look*, hubby wanted to take a peek at the new cummins. He's looking at next fall for buying one, we were in and out in a flash no salesman bothered us or anything.
I posted a real life example (post #6026) where my trade sold within hours of trade, and my trade was delivered to the new owner before I took delivery of my new car.
I asked the question in that post, "how does an auditor know this transaction is not an In/Out?" My question still stands.
You guys should just buy a brand new top-of-the-line diesel truck and keep it as long as you can before it starts needing too much work (maybe 10 yrs?). Buy at the end of the year, get the "big" discount, and drive that baby!
Mark
Still, people will argue with you in an attempt to find a loophole.
People underestimate the smarts and resources of a good tax auditor.
Once a business (or individual) has been singled out for game playing, the intense scrutiny will never end.
And...that's how it should be!
As for a new truck, not until next fall, we need to pay my Explorer off first.
The 2nd buyer buys the trade and pays taxes on the "selling" figure, in the meantime, the dealer get's the title either now, or after the pay-off from buyer #1, the title gets "flipped" over to the selling dealers name and at purchase, the 2nd buyer will get that title in his name and/or lender ...
I think where everyone is getting confused is .. if a dealer "allows" someone to bring their trade-in on the deal and then use it to offset the taxes ~ and then "allow" that buyer to take it home and sell it on his own ... if no taxes are being paid, then that's illegal .! - Period.! ... depending on the State, both the dealer and the "original" buyer are in for potential fraud AND Tax evasion, "avoidance" has nothing to do with it .l.o.l...
The reason why dealers don't do it is, as a rule (if there is one), the State would rather pursue the dealer, *it's a business* and it must *conform to all the tax laws in the State ~ the original customer can say - "Hey, I didn't know" "they told me it's done everyday" "I had no Idea, what would I know, I'm not in the business", etc, etc.com.
To answer your question, how will they know .?
Easy .. how many titles came in, and how many vehicles went out and what taxes were paid, takes them "oooh" about 15 minutes on a hand calculator ...
Terry.
Also, what is the name that "Alaskians" call the locals who have been there a while?
A friend of mine and her family run a B and B in Skagway..... another nice town.
Mark