ebbai

I have a question about trading cars.
I'm trying to trade my car with another car and my car is worth much more than the other car.

if we decide to trade our cars, do each of us have to pay taxes on each car?
or does the other guy pay the tax just for the difference?

both cars are paid off and we both have the title in hand.

agisd

If it is a private transaction there are no tax savings I think. Both of you you will need to pay tax when registering the car.

ace123

/\/\
i thought that was the way it goes too.

it is state law that governs this though, so it would be worth checking in case your state is the exception to the rule and you luck out. also, barter is not really sale, so the question is a good one.

it's probably worth splitting the bill to have an accountant do a quick consult--he'll know how to pay the least taxes without getting into legal issues. i'd bet that saves you both money and headache.

agisd

At least in my province the tax was based on the black book value of the car so there was no way to pay less than that.