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What was meant on the taxes he does not have to pay sales tax on the 26k by trading in veh. New veh 50K minus trade in 26k he only pays taxes on the 24k difference
What was meant on the taxes he does not have to pay sales tax on the 26k by trading in veh. New veh 50K minus trade in 26k he only pays taxes on the 24k difference
So you're saying the amount of tax on $2000 is more than $2000?
If a private party gives him $28k for his car, but a dealer will only give him $26k on trade, he's making $2000 less dollars. It's pretty simple. It doesn't matter what the tax is.
Using your example, if he buys a new car for $50k but now uses the $28k he got off the sale of his car, he now only has to pay tax on $22k. 22k < 24k.
What was meant on the taxes he does not have to pay sales tax on the 26k by trading in veh. New veh 50K minus trade in 26k he only pays taxes on the 24k difference
Not true in CA, new car at $50K is taxable as sales tax (regardless of value of trade).
OP was talking about selling his car to individual.
If you sell your car to an individual in Texas the state has a predetermined value on most vehicles and the person buying the car pays taxes title transfer and licence plates
If you sell your car to an individual in Texas the state has a predetermined value on most vehicles and the person buying the car pays taxes title transfer and licence plates
Yes, that's the buyer that pays the sales tax, not the seller.
That is not true. He is selling his privately owned motor vehicle that was used as personal transportation.
thats odd. for instance, if the car was worth 26k (book value) and sold for 28k (market value), the seller DOESNT pay tax on the extra 2K? i asked my accountant about this very situation, and she said that the seller does, as it is a gain from selling personal property. its the same scenario as i was taught while taking my accounting classes. i only referred to selling it privately, not through the dealer.
thats odd. for instance, if the car was worth 26k (book value) and sold for 28k (market value), the seller DOESNT pay tax on the extra 2K? i asked my accountant about this very situation, and she said that the seller does, as it is a gain from selling personal property. its the same scenario as i was taught while taking my accounting classes. i only referred to selling it privately, not through the dealer.
this doesnt make sense to me, either.
assuming the price of this car is paid in full, say 40,000. selling it at 28,000 is a loss of 12,000 dollars. why would the seller have to pay taxes on a loss?
if this car is sold for 45,000, then the seller pays taxes on the 5000 gain.
i'm no tax expert, but this scenario makes more sense.
02-17-10, 01:00 PM
