starbai

iTrader: (1)

So my IS350 Fsport lease is up towards the end of the year. I've already bought another car and my brother is paying the lease and driving the car and has insurance in his name. I trust him so I'm not worried about this.

At the end of the lease, he wants to buy out the car.

My question is, whats the best way to do this?

I'd like to just pay the $200 fee and transfer it now. But I just read an FAQ on leasetrader that this can't be done anymore since we're less than 6 months to the end. I'm going to call Lexus Financial tomorrow and find out if they'll do it anyway. I think this would be best as the lease would be in his name and then he could pay it off and pay the taxes on it one time.

I know that he could just pay off the lease even if we keep the lease in my name, they send me the title and I "sell" him the car after I get it. The problem is would we have to pay taxes twice? I know there's sales tax in the state of FL on the payoff amount that has to be paid. But if I transfer the title to him after this, I think I'm technically selling it to him and then he'll have to pay sales taxes again? I don't want to have to pay taxes on this one transaction twice. (Yes I'd pay mine and he pay his but still its a waste).

Any advice on how to best do this?

Thanks in advance!

PS I am considering leasing another Lexus for my wife soon (perhaps around the same time this lease ends) either a GS350 or possibly an GX. I don't know if Lexus may throw some extra help our way if we decide to lease something new from em'?

starbai

iTrader: (1)

In Florida, I dont think you can transfer a title without a bill of sale. A bill of sale (if being honest) will have the appropriate value of the car and he'll have to pay a sales tax on that. I do trust him and would be fine with having lexus put it in his name, if they'll do it.

I wish i knew about the 6 month threshold ahead of time (i'm sure it was in the paper work I just didn't notice it) I would have just paid the $200, transfered it, and he could buy it paying taxes once.

starbai

iTrader: (1)

Yea I wonder if since the payment will come from him to pay off the lease, that is, no transfer of funds from me to Lexus and then from him to me (one financial transaction rather than two) if that will be the saving grace and trigger a taxable event only once.

scooky

In WA state, you can sell a car for whatever price you like. You will get taxed on the amount you report, which some people alter to be lower to save on tax. State is on to that game. They reserve the right to tax you more if they think the reported sales price is too low for that vehicle/age/condition/etc. I'm not certain how that value is determined. I "think" it is based on a % below the NADA or BlueBook value. Something like that. I imagine there is a way to appeal the decision if there are special circumstances related to the price. Salvage Title, that sort of thing.

starbai

iTrader: (1)

I have heard this too. It really all comes down to the DMV rep at the counter if they wanna make a fuss about it or not. If they do I've heard that it has to be within X% of the wholesale value. If you don't agree with their number, it's on you to prove it the value.

I gave my dad my 2009 GS350 AWD which at the time was worth like maybe 20k. Truly a gift, and I just did up a bill of sale which said 'gift' and probably because we have the same last name, they didn't question it.

In this case, though the car will have a lien on it since he won't be paying cash... so they'll have a record of the value paid if they wanna dig deep enough. I dunno I'm just of the mindset that the govt going get your *** one way or another... rather do it right. But, in the most efficient/legal way possible.

wasjr

I would be interested to know if you are allowed to assign the right to purchase the vehicle at the end of the lease.

When you are checking with the DMV, see if the rules in FL are the same as in TN in that vehicle transfers to "lineal" relatives, which include siblings, are not taxable. If this is true in FL, that gets around any double taxation.

Re the below market sale mentioned above, in TN you have to submit an affidavit in the case of a gift transfer or a low price sale to further document the consideration paid. In TN the guideline to a below market price is 75% of the market value. In the case of gifts or inheritance of vehicles, there is an affidavit for that too.

Sulu

Some factors to consider:

• How do you pay sales tax and how do you have to pay in your home state? What if you sell across a state line? When you sell a car privately, how much sales tax do you have to pay? Here, in the province of Ontario, Canada, at one time, you paid sales tax on the reported transaction price, so the buyer would get the seller to report a sales price of $1. That has been changed so that now, sales tax is paid on the sales price or the wholesale price (as reported in the Canadian Red Book), whichever is greater.
• Can you avoid paying sales tax if you give the car as a gift to your brother? Are you allowed to transfer title (by giving the car as a gift) to a relative without paying sales tax? Here in Ontario, if you transfer title to an immediate relative (spouse, brother/sister, parent/child), you do not pay tax; otherwise, you do.

JDR76

It varies greatly by state.

Here in Washington, I was gifted a truck from my in-laws. Truck was registered in Oregon but that didn't seem to matter. I just had to go register it at the local WA DOL office, and show the signed bill of sale stating that it was a gift. I did not have to pay any sales tax.

FatherTo1

Same in California. My Dad and I gifted each other our cars. We needed a bigger car with covered space so my Dad and I swapped a Tundra and Sequoia as gifts. Will Florida allow you to gift the car to your brother?

tex2670

The first thing you need to do is read your lease and understand the terms. Next, I'd call Lexus Financial and explain what you want to do, and see what they can do for you. Getting input here is great, but your lease and LF policies govern the transaction in the end--not LeaseTrader FAQs.