putting lower price on bike during sale?

[NinjaDoc]

Some one is interested in my zx6r and would buy it for a reasonable price. But he requested if its okay to put the price lower on the title during sale to escape tax. I think its pretty common practice for used bike sales. Just wanted to ask will it affect me in the long run in any ways? any thing to be looking out for?

[scottie.harris]

It wont affect you at all unless you put stupid low price the bmv may call you about it. Id just put like 2k on a 6k dollar bike. If they ever did call just say something was wrong with it.

Personally i have done this with eveyything ive bought and sold privatly.

[crb]

I wouldn't if it were me, not worth it.

[NinjaDoc]

i put exact price when i bought the vfr, but the sales tax was heavy

but i did it nonetheless just to be on safe side, but it buyer requests it and if no big problem for me i am willing to take the chance thats why. Other than the bmv follow up any thing from finance/tax point of view?

[ZachG91]

I didnt do it only because i did not consult with the seller about it. If we were both on the same terms on a lower price, i wouldn't be worried about it.

[jporter12]

It is illegal to do so.

IF you do it, make sure that you both remember it, so that if you get a letter from the BMV, (or whoever questions it) you are in agreement of what you sold it for (what it says on the title.)

[crb]

It is illegal to do so.

IF you do it, make sure that you both remember it, so that if you get a letter from the BMV, (or whoever questions it) you are in agreement of what you sold it for (what it says on the title.)

Exactly why I haven't done it. If anything I would actually lower the price a little to help him the tax.

[C-bus]

I would not discuss tax evasion on a public forum. Leave the price blank and let him deal with the law.

[NinjaDoc]

so i guess not to do it is the right and best answer. Thanks for the input guys.

One more doubt, to notarize the title both parties and bike shud be present? and is bank the only place to approach or any other place we can go?

[jporter12]

I would not discuss tax evasion on a public forum. Leave the price blank and let him deal with the law.

Isn't that an even worse idea? I thought the price was supposed to be filled in by the seller?

[fox_racing_guy]

One more doubt, to notarize the title both parties and bike shud be present? and is bank the only place to approach or any other place we can go?

The buyer does not need to be present and you don't have to have the vehicle on site when you have it notarized. Most car/cycle dealers have a notary on staff that can stamp it for you.

[Bubba]

Technically and legally, the notary is putting his official stamp on a "completed" document, specifically, the top section of the back of the title. He is attesting to the fact that the signer of the title is indeed, the person who owns the vehicle. Your notarized signature on the title is a sworn statement saying that you are the legal owner and that all the information, including the sales price, the vehicle mileage, and the name and address of the new owner are accurate.

That being said, most notaries will simply ask for a picture ID and verify your signature and stamp the incomplete title. If the state DID dispute the accuracy of the information entered on the title, they could presumably try to collect the unpaid sales tax from the buyer and you could be subject to fines. The way revenues are short these days, don't count on the state NOT going after more money if they think they are owed.

The bottom half of the title is completed by the buyer and can be done later at the time of transfer at the registrar office.

Edited June 9, 2012 by Bubba

[ReconRat]

1. Some notaries make you swear it's the truth. I find that humorous.

2. BMV sometimes sends out letters asking each party how much the transaction was.

I haven't heard what happens if the two come back as a mis-match.

3. From experience, if you wreck the vehicle, the insurance company wants to pay out what was on the title. Particularly if it was another party's fault and a settlement from their insurance company. But your own insurance company would probably also offer the amount that was on the title.

It's often not very much difference in cost, and I consider it good insurance.

[Scruit]

You could make the accessories that didn't originally come with the bike separate sale.

i.e Bike would be worth $3k with the farkles, or $2k without. So you could sell the bike for $2k, the farkles for $1k. Now of course you are selling them the same person, but the accessories re not taxable. This only applies to accessories that are not factory, and that can be removed without making the bike inoperable or illegal. Backrest, saddlebags, armrests, gps mount etc. Even aftermarket windshield, grips, corbin seats etc can be sold separately if you still have the originals to put back on the bare bike.

Don't get greedy. Don't be stupid and sell a $1 bike and $2,999 in accessories.

Edited June 9, 2012 by Scruit

[Steve Butters]

ive been busted for this once, so i can talk from personal experience

1. if its a suspicious amount, like putting $100 on a 2011 s1000rr, they will investigate it. they will check your bank records on the sale date to find any large deposits/withdraws etc. if they can determine that it was sold at a different price, the buyer will then be liable for the tax.

2. if its suspicious, but not enough to warrant investigating, like say $1000 on a $5000 bike, they will send out a letter to both buyer and seller asking what the sale price was. if the totals are different, they will want tax on the highest price...if seller says 1000 and you said 500 and paid tax on 500, you will owe tax on the other 500 the seller admitted to.

3. YOU have nothing to worry about....it is all up to the buyer as to how much risk he is willing to take. people who claim you will be fined etc probably havent been in this situation. if the state determines that the sale price on the title was wrong, they will go after the buyer for the tax money. it will be tax money they feel is owed, not a fine. if they find evidence of a sale that day, as they did in my case, they will bill you for that much....if no sale, they will blue book it and detemine a book value and tax you on it.....both situations will give you a chance to dispute and prove you paid a lesser amount, but goodluck finding proof for something you didnt do

4. i wouldnt discuss this on an open forum.....it is illegal

as for my situation, i bought a car for 8000 from a grove city police officer....asked him to cut me a break on tax price and he said no worries since his best friend was the notary. he assured me if he put "Gift" on the title, nothing would happen. he said the bmv would contact the notary to confirm and since his friend was the notary it would be fine.

i paid $500 on that sunday and picked it up, then paid him $7500 on wednesday when i picked up the title (got the car before paying for it fully since i had to sell my other to buy it and he was nice enough to let me drive it a few days before buying)

few months later, i get a notice in the mail that the bmv investigated and determined that i spent 7500 on the car and that i owed $500 or whatever it came out to in backed taxes....no fees, no fines, etc....said i had one month to pay before "further action" was taken

the only way they could have gotten that 7500 number is by looking at my bank transaction on the date of the sale.....my grandma loaned me the $500 deposit in cash, so it wasnt on paper anywhere...only the $7500 deposit from carmax where i sold my truck, and the $7500 withdrawl that i used to pay the seller

in the end, i ended up paying what i owed, nothing more...and the police officer who sold it to me was never even contacted about the situation

got busted, paid what i owed....learned a lesson

i will still do it for other people when i sell, and when i buy ill ask too....but with more reasonable amounts (few thousand off, etc...nothing under $100 or anything crazy)

[Beegreenstrings]

I have done this before. You both have to be in a agreement of the price. If the state calls you or him and ask them you better know what price to say

[NinjaDoc]

Thx again for the detailed info, will do it the right way.

[jporter12]

ive been busted for this once, so i can talk from personal experience

1. if its a suspicious amount, like putting $100 on a 2011 s1000rr, they will investigate it. they will check your bank records on the sale date to find any large deposits/withdraws etc. if they can determine that it was sold at a different price, the buyer will then be liable for the tax.

2. if its suspicious, but not enough to warrant investigating, like say $1000 on a $5000 bike, they will send out a letter to both buyer and seller asking what the sale price was. if the totals are different, they will want tax on the highest price...if seller says 1000 and you said 500 and paid tax on 500, you will owe tax on the other 500 the seller admitted to.

3. YOU have nothing to worry about....it is all up to the buyer as to how much risk he is willing to take. people who claim you will be fined etc probably havent been in this situation. if the state determines that the sale price on the title was wrong, they will go after the buyer for the tax money. it will be tax money they feel is owed, not a fine. if they find evidence of a sale that day, as they did in my case, they will bill you for that much....if no sale, they will blue book it and detemine a book value and tax you on it.....both situations will give you a chance to dispute and prove you paid a lesser amount, but goodluck finding proof for something you didnt do

4. i wouldnt discuss this on an open forum.....it is illegal

as for my situation, i bought a car for 8000 from a grove city police officer....asked him to cut me a break on tax price and he said no worries since his best friend was the notary. he assured me if he put "Gift" on the title, nothing would happen. he said the bmv would contact the notary to confirm and since his friend was the notary it would be fine.

i paid $500 on that sunday and picked it up, then paid him $7500 on wednesday when i picked up the title (got the car before paying for it fully since i had to sell my other to buy it and he was nice enough to let me drive it a few days before buying)

few months later, i get a notice in the mail that the bmv investigated and determined that i spent 7500 on the car and that i owed $500 or whatever it came out to in backed taxes....no fees, no fines, etc....said i had one month to pay before "further action" was taken

the only way they could have gotten that 7500 number is by looking at my bank transaction on the date of the sale.....my grandma loaned me the $500 deposit in cash, so it wasnt on paper anywhere...only the $7500 deposit from carmax where i sold my truck, and the $7500 withdrawl that i used to pay the seller

in the end, i ended up paying what i owed, nothing more...and the police officer who sold it to me was never even contacted about the situation

got busted, paid what i owed....learned a lesson

i will still do it for other people when i sell, and when i buy ill ask too....but with more reasonable amounts (few thousand off, etc...nothing under $100 or anything crazy)

Is it legal for them to go checking your bank records like that without your knowing?

[Steve Butters]

Is it legal for them to go checking your bank records like that without your knowing?

not sure, but how else would they have known the exact amount i withdrew (which wasnt actually the amount i paid for the vehicle)

[Cheech]

I would not discuss tax evasion on a public forum. Leave the price blank and let him deal with the law.

Bingo., except for the leaving the price blank bit. Something needs to be put in there, otherwise the seller could just as easily put 0 and if the taxman comes around asking about weird gifts you would have no idea what he's talking about.

[crb]

Is it legal for them to go checking your bank records like that without your knowing?

I would think they would need a warrant

[Josh1234]

ive been busted for this once, so i can talk from personal experience

in the end, i ended up paying what i owed, nothing more

got busted, paid what i owed....learned a lesson

I paid cash... They didn't look into my bank records. They must have contacted the seller. Good thing he didn't give a HIGHER number, or I'd've had to pay MORE. I shouldn't have been so greedy as to put "free" as the price

But yeah, this should pretty much answer everyone's question about what might happen

[Steve Butters]

I paid cash... They didn't look into my bank records. They must have contacted the seller. Good thing he didn't give a HIGHER number, or I'd've had to pay MORE. I shouldn't have been so greedy as to put "free" as the price

But yeah, this should pretty much answer everyone's question about what might happen

hell i dont know how they figure it out then....the guy i bought my car from said he was never contacted, and they somehow knew exactly how much i withdrew that day for the car, which wasnt even the purchase price....i assumed the only way they could figure that out was bank records...maybe the guy you bought it from made a big deposit same day?

no matter how they did it, they found out...my letter was the same as yours lol

[Josh1234]

scared the crap out of me... I was worried that paying up promptly would mean I was admitting guilt in trying to commit tax fraud or something. I was like "I'm just gonna pay this ASAP and hope it ends there." So far so good.

[Steve Butters]

yea mine was a few years ago. never heard anything else after i paid it