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Legal/ accounting issue help


ghost face

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Here is the situation:

 

Say a person receives a car from his/her previous employer and titled the car to the person while the funds were provided by the employer. Upon termination of the employment if the person returns the car by essentially sell the car back to the employer for $0, are their any legal issues/ tax issues associated with this transaction?

 

Additional info: No contract/ legal binding of the car being returned upon termination of the employment. Person used the car for business/ personal uses and fees associated with ownership of the car were paid by the person.

 

 

Obvious solution to the situation is to not return the car, but I am wanting to know if any body have any insight on the matter if the car were to return to the employer.

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The car was paid for by the CEO of the organization from their personal accounts, with no string attached. No Stipend in the check. Essentially it was a gift, because it was voluntary from the organization. When I said it was used for business, I meant as transportation from and to work at the same location.
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The car was paid for by the CEO of the organization from their personal accounts, with no string attached. No Stipend in the check. Essentially it was a gift, because it was voluntary from the organization. When I said it was used for business, I meant as transportation from and to work at the same location.

 

CEO: "Your honor, we have in hand the cashed checks that prove we paid for the car. We allowed our employee to title the car in his name for insurance and liability purposes, in according with our company policy, but we had an implied oral agreement that if the employee were to separate, ownership of the vehicle would be transferred to the company."

 

Judge: "I see. Defendant? What say you?"

 

You: "I totally thought they were just giving me a free car for being such a stellar dude. They never said nothing about giving the car back."

 

 

If nothing else, this is a lesson in why it's always best to write things down. Possession being 9/10ths, they're going to have to go to court to get you to sign over the title. I think there's a good chance that you'll lose. I think there's a great chance that getting a free car won't be worth the headache, especially when you know damn well that you didn't earn it.

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CEO: "Your honor, we have in hand the cashed checks that prove we paid for the car. We allowed our employee to title the car in his name for insurance and liability purposes, in according with our company policy, but we had an implied oral agreement that if the employee were to separate, ownership of the vehicle would be transferred to the company."

 

Judge: "I see. Defendant? What say you?"

 

You: "I totally thought they were just giving me a free car for being such a stellar dude. They never said nothing about giving the car back."

 

 

If nothing else, this is a lesson in why it's always best to write things down. Possession being 9/10ths, they're going to have to go to court to get you to sign over the title. I think there's a good chance that you'll lose. I think there's a great chance that getting a free car won't be worth the headache, especially when you know damn well that you didn't earn it.

 

i wouldnt use the word "thought". ignorance is not valid

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True. If you're perjuring yourself, you might as well go balls out. "They told me 12 times, in church, during mass, in front of my now deceased grandmother, that the car was a gift. And now they're here in court lying through their slimy teeth just to make a buck. And if they win, I won't be able to deliver food to the orphans. I only hope the hospital can find another driver to get those kidneys to the AIDS cancer babies who so desperately need them."
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True. If you're perjuring yourself, you might as well go balls out. "They told me 12 times, in church, during mass, in front of my now deceased grandmother, that the car was a gift. And now they're here in court lying through their slimy teeth just to make a buck. And if they win, I won't be able to deliver food to the orphans. I only hope the hospital can find another driver to get those kidneys to the AIDS cancer babies who so desperately need them."

 

I cried.

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maybe i am not seeing this from all of your views, but the original question was

 

"Upon termination of the employment if the person returns the car by essentially sell the car back to the employer for $0, are their any legal issues/ tax issues associated with this transaction?"

 

to me, it sounds like he's asking if theres any issues if he were to "sell" it back for $0

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maybe i am not seeing this from all of your views, but the original question was

 

"Upon termination of the employment if the person returns the car by essentially sell the car back to the employer for $0, are their any legal issues/ tax issues associated with this transaction?"

 

to me, it sounds like he's asking if theres any issues if he were to "sell" it back for $0

 

That was my concern. Does the person still have to pay/ report gift tax even though the car was return? Also isn't gifting the car to someone and writing it off as a gift and than receiving back, wouldn't it cause of legal issues?

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This is completely dependant upon the way your company handled the transaction in their books or if it even happened on the books (I'm not sure what kind of business size we're dealing with here). Anyway, this hassle was all because your company can receive more benefit from buying you the car and reporting it on your wages than to buy it and depreciate it themsleves. What's the amount on the title?? What year did this happen, and did the car show up on your w-2 earnings? Hassle for nothing now isn't it? Edited by Miller
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