What's My Car Worth and
#16
A state's tax rules are not going to vary based on what brand you lease or who you lease through. The same rules that apply in NYS for BMWs also apply to MBs and P cars.
If you take over a lease in NYS, you are going to have to pay sales tax on the remaining payments or show proof that the entire tax amount was paid upfront. You are probably thinking of leases which had the entire tax paid upfront, rather than some difference caused by brand or finance company.
If you take over a lease in NYS, you are going to have to pay sales tax on the remaining payments or show proof that the entire tax amount was paid upfront. You are probably thinking of leases which had the entire tax paid upfront, rather than some difference caused by brand or finance company.
#17
Rennlist Member
Join Date: Mar 2007
Location: West Los Angeles & Truckee, CA
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That info isn't exactly correct for California. I went through this process of buying out my lease and selling it to a third party in August. In California there is what is known as "The Ten Day Rule". This rule specifically relates to leased cars that are purchased by the lessee and sold, within ten days, to third party. If you fulfill this requirement you are not liable for sales tax in the state of California. However, you will owe taxes on any amount you sell the car for that is greater than the lease payoff price.
The trick here is that you do have to line up all your ducks and get the Title from PFS and complete the transaction within the time period (CA DMV told me that you actually have 30 days but I wouldn't trust that DMV talks to the Franchise Tax Board so I conducted my transaction within the confines of the rule.
If you want more information you can either go to the Franchise Tax Board or DMV Website or just do a global search on California car sale Ten Day Rule.
Hope this helps.
The trick here is that you do have to line up all your ducks and get the Title from PFS and complete the transaction within the time period (CA DMV told me that you actually have 30 days but I wouldn't trust that DMV talks to the Franchise Tax Board so I conducted my transaction within the confines of the rule.
If you want more information you can either go to the Franchise Tax Board or DMV Website or just do a global search on California car sale Ten Day Rule.
Hope this helps.
#19
The states rules dont change but the way different companies write the lease and handle the $ differs. with BMWFS, even if the entire tax was put upfront you pay the tax again. This is a fact. I had to do it and I know of many others who did. I also took over a MB lease and it was a completely different process.
to the OP, good luck. hope it all works out for you
#20
Three Wheelin'
Yes, this Is what I understand the rules to be. So ultimately if your lease buy out iS 50k, you'd have to get a deal lined up and closed within 10 days or else you pay the tax on 50k. If you sell it for 52k, are you saying that you would pay tax on the 2k, and the buyer pays tax on the 52k too? That seems like the FTB is getting tax on 54k vs. the sale price of 52k. Unless the buyer only pays the tax on the 50k lease payoff, then it adds up.
#21
Yes, this Is what I understand the rules to be. So ultimately if your lease buy out iS 50k, you'd have to get a deal lined up and closed within 10 days or else you pay the tax on 50k. If you sell it for 52k, are you saying that you would pay tax on the 2k, and the buyer pays tax on the 52k too? That seems like the FTB is getting tax on 54k vs. the sale price of 52k. Unless the buyer only pays the tax on the 50k lease payoff, then it adds up.
Forget about the lease aspect for the time being. E.g., a $100K (new) car is sold. Over time it is then re-sold at $75K, $50K and $25K. So on the same, originally $100K car the tax guys have collected on $250K.
#22
Hey Tcc1999 I sent you a messege, but just in case...
I am in the same situation as you were. I can realistically sell my car for 6-7k more than my buyout. I would love to know my best options. As of now DMV and dealers have told me that I have to pay tax on my buyout even though i mentioned the 10 day thing. They may just be lying to me for their own benefits, or unaware based on what you are saying/citing and your experience. You mention having to pay on that gain? I am assuming i claim that next year, and if so do you have an idea on how much that may get taxed percentage wise. If it helps my car is actually a 17k buyout (not porsche) and my income is sub 70k. Id love any input. Because the 8.75% on the 17k isnt terrible if the gain tax is more than 30%. Any input would be great thanks.
I am in the same situation as you were. I can realistically sell my car for 6-7k more than my buyout. I would love to know my best options. As of now DMV and dealers have told me that I have to pay tax on my buyout even though i mentioned the 10 day thing. They may just be lying to me for their own benefits, or unaware based on what you are saying/citing and your experience. You mention having to pay on that gain? I am assuming i claim that next year, and if so do you have an idea on how much that may get taxed percentage wise. If it helps my car is actually a 17k buyout (not porsche) and my income is sub 70k. Id love any input. Because the 8.75% on the 17k isnt terrible if the gain tax is more than 30%. Any input would be great thanks.
#23
Hey Tcc1999 I sent you a messege, but just in case...
I am in the same situation as you were. I can realistically sell my car for 6-7k more than my buyout. I would love to know my best options. As of now DMV and dealers have told me that I have to pay tax on my buyout even though i mentioned the 10 day thing. They may just be lying to me for their own benefits, or unaware based on what you are saying/citing and your experience. You mention having to pay on that gain? I am assuming i claim that next year, and if so do you have an idea on how much that may get taxed percentage wise. If it helps my car is actually a 17k buyout (not porsche) and my income is sub 70k. Id love any input. Because the 8.75% on the 17k isnt terrible if the gain tax is more than 30%. Any input would be great thanks.
I am in the same situation as you were. I can realistically sell my car for 6-7k more than my buyout. I would love to know my best options. As of now DMV and dealers have told me that I have to pay tax on my buyout even though i mentioned the 10 day thing. They may just be lying to me for their own benefits, or unaware based on what you are saying/citing and your experience. You mention having to pay on that gain? I am assuming i claim that next year, and if so do you have an idea on how much that may get taxed percentage wise. If it helps my car is actually a 17k buyout (not porsche) and my income is sub 70k. Id love any input. Because the 8.75% on the 17k isnt terrible if the gain tax is more than 30%. Any input would be great thanks.