Re: can you still save taxes on trading in a car, without a car?
[Re: Andrewh]
#3083642
10/05/22 07:13 PM
10/05/22 07:13 PM
|
Joined: Dec 2007
Posts: 20,000 Puttin' on the foil in Charles...
not_a_charger
Mr. Big Shot Moparts Moderator
|
Mr. Big Shot Moparts Moderator
Joined: Dec 2007
Posts: 20,000
Puttin' on the foil in Charles...
|
If you trade in a car, the amount you pay in taxes is reduced by the amount of tax applicable to what they paid you on the trade in. If you have nothing to trade in, you'll pay tax on the full purchase amount.
Earning every penny of that moderator paycheck.
DBAP
|
|
|
Re: can you still save taxes on trading in a car, without a car?
[Re: formula_s]
#3083665
10/05/22 08:46 PM
10/05/22 08:46 PM
|
Joined: Dec 2007
Posts: 20,000 Puttin' on the foil in Charles...
not_a_charger
Mr. Big Shot Moparts Moderator
|
Mr. Big Shot Moparts Moderator
Joined: Dec 2007
Posts: 20,000
Puttin' on the foil in Charles...
|
......so my wifes car was totaled earlier this year.......
In NY when the insurance company pays you for a totaled car they include the sales tax on that amount. Correct. In some states, it's required to be paid as part of the total loss settlement. TX, NY, and many others are that way. In IL and OH, the state gives the insurance company the option to pay it at the time of settlement, or after the person replaces the totaled vehicle if done so within 30 days of settlement. In South Carolina, tax is owed but the amount owed is capped at $500. He's asking about offsetting the tax paid on the replacement vehicle though. Only way to do that is with a trade-in. But, if he was paid the sales tax on the totaled vehicle, he's in the same position as he would be if he were trading the car in pre-loss.
Earning every penny of that moderator paycheck.
DBAP
|
|
|
Re: can you still save taxes on trading in a car, without a car?
[Re: Andrewh]
#3083748
10/06/22 09:29 AM
10/06/22 09:29 AM
|
Joined: Oct 2007
Posts: 4,324 St. Louis, Mo
318 Stroker
master
|
master
Joined: Oct 2007
Posts: 4,324
St. Louis, Mo
|
so my wifes car was totaled earlier this year. my understanding is if you trade a car in you can save taxes on the trade in amount towards your new car. how does that work if you got a totaled car check from insurance? or can you even do anything about that? I'm in Missouri. August of 2021 my 2010 Challenger was totaled. I received an insurance settlement on it. I then had it was either 90 or 120 days (don't remember) to use that amount as an offset on the sales tax I paid on the replacement Challenger. I did that and only paid sales tax on the difference. Insurance company gave me letter which took to the DMV when I registered and paid tax on the replacement car. In effect, you sold your wrecked car to the insurance company instead of selling the unwrecked car to an individual, or trading it in to a dealer. Not sure of your state laws, but you should be able to use the settlement as a credit on the replacement car as long as the time period to do so has not expired.
Last edited by 318 Stroker; 10/06/22 09:38 AM.
|
|
|
Re: can you still save taxes on trading in a car, without a car?
[Re: 318 Stroker]
#3083788
10/06/22 12:15 PM
10/06/22 12:15 PM
|
Joined: Dec 2007
Posts: 20,000 Puttin' on the foil in Charles...
not_a_charger
Mr. Big Shot Moparts Moderator
|
Mr. Big Shot Moparts Moderator
Joined: Dec 2007
Posts: 20,000
Puttin' on the foil in Charles...
|
Not sure of your state laws, but you should be able to use the settlement as a credit on the replacement car as long as the time period to do so has not expired. MO has no statutory requirement regarding sales tax, which is why the insurer chose to handle it the way that they did in your situation. Not every insurer in MO will do so, and that's also not how it is handled elsewhere. "You should be able to..." is not correct.
Earning every penny of that moderator paycheck.
DBAP
|
|
|
Re: can you still save taxes on trading in a car, without a car?
[Re: not_a_charger]
#3083801
10/06/22 12:40 PM
10/06/22 12:40 PM
|
Joined: Oct 2007
Posts: 4,324 St. Louis, Mo
318 Stroker
master
|
master
Joined: Oct 2007
Posts: 4,324
St. Louis, Mo
|
Not sure of your state laws, but you should be able to use the settlement as a credit on the replacement car as long as the time period to do so has not expired. MO has no statutory requirement regarding sales tax, which is why the insurer chose to handle it the way that they did in your situation. Not every insurer in MO will do so, and that's also not how it is handled elsewhere. "You should be able to..." is not correct. Thanks for the clarification...
|
|
|
Re: can you still save taxes on trading in a car, without a car?
[Re: 318 Stroker]
#3083892
10/06/22 06:36 PM
10/06/22 06:36 PM
|
Joined: Jan 2003
Posts: 11,725 Portage,michigan
B3422W5
I Live Here
|
I Live Here
Joined: Jan 2003
Posts: 11,725
Portage,michigan
|
Dealer here.
Tax rules vary state to state regards tax savings on trade ins. Here in Michigan, we have 6% sales tax. The tax savings on trades has ramped up from if I remember right 1500 to the current 8,000. So, in other words, if the value of your trade is 8k or more, you get a tax savings of 480 bucks, 6% of 8,000.
69 Dart GTS A4 Silver All steel, flat factory hood, 3360race weight 418 BPE factory replacement headed stroker, 565 lift solid cam Best so far, low 10.30’s 1/4 1.41 best 60 foot 6.56 at 104.17
|
|
|
|
|