14 Aug What’s the best way to sell or gift my car for $1?

Q. I am not legally married but have been in a relationship and living together as a family for 12 years. Although we refer to ourselves as spouses, we are not legally married. I’d like to transfer the title of my car to my “husband” for my “stepson’s” use for $1. I’ve read that if I gift it to a family member there is no federal tax. But we are not legally family members. How can we avoid tax? The car’s value is $22,000.
— Trying to help

A. Making a gift of a vehicle is a generous gesture and no doubt your stepson will be excited to have his own wheels.

You don’t have much to worry about here.

When it comes to gifting, every individual is currently allowed to give up to $17,000 to family members or friends without the need to file a gift tax return (IRS Form 709), said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

“Gift taxes would not need to be paid until the exclusion of $12.92 million is exceeded,” she said. “If the fair market vehicle of your car is $22,000, you may need to file the gift tax return for the additional $5,000. In essence, selling the car for $1, given its value, would also be considered a gift.”

Mott said you’ll want to confirm the fair market value of the vehicle based on its current mileage and condition and keep a record of it. A bill of sale should also be completed, indicating that the vehicle is a gift and you may want to have it notarized, she said.

Additional information for the bill of sale document would be the make, model, year, and VIN, the odometer reading, date of transfer, fair market value, your name, address, and signature and your partner’s name, address, and signature.

Before going through the transfer process, be sure to look at the Motor Vehicle Commission website for details on how to transfer the title.

And finally, Mott said, because the car is a gift, no New Jersey sales tax will be due.

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This story was originally published on Aug. 14, 2023.

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