Q. My dad, who lived in Pennsylvania., passed away and my sister, who also lives in Pennsylvania, had the title to his car transferred to her. She has decided that she does not want the vehicle and wants to give it to me as a gift. I live in New Jersey. What are the tax ramifications for both of us since the vehicle is titled in Pennsylvania and I will be registering and titling it in New Jersey?
— Figuring it out
A. Here’s how it works.
Assuming your sister has clear title to the car and there is no loan outstanding, your sister will need to transfer of ownership to you — something typically done by signing the back of the title.
When you retitle the car into your name in the State of New Jersey, you will need to complete a NJMVC Universal Title Application, said Gerard Papetti, a certified financial planner and certified public accountant with U.S. Financial Services in Fairfield.
You will also have to follow the instructions regarding the exemption from New Jersey sales tax as noted on the New Jersey Motor Vehicle Commission website:
It says: “If the vehicle is a gift, the sales price must be noted as `GIFT.’ If the information appears to be changed or altered, additional documentation may be required by the Motor Vehicle Commission.”
Based on the fact you received the car as a gift, no New Jersey sales tax will be due, Papetti said.
As for any gift tax that may be due, let’s look at how the federal, Pennsylvania and New Jersey gift tax rules work.
Federal gift tax law allows a U.S. taxpayer to give an individual up to the annual gift tax exclusion of $15,000 per year, Papetti said. “A married couple can give up to $30,000 even if only one spouse makes the gift as long as the non-donor spouse consents to the gift-split on the Federal Gift Tax Return, Form 709.”
Therefore, if the car is worth $15,000 or less — $30,000 if your sister is married and gift splits — there is no federal gift tax consequence, Papetti said. If the car is worth more than $15,000 — or more than $30,000 if your sister is married and gift splits— Form 709 is required to be filed to report the excess over the annual exclusion gift amount, he said. The excess is called a “Taxable Gift” and will reduce your sister’s $11.7 million lifetime gift tax exemption.
And finally, he said, neither Pennsylvania or New Jersey has a gift tax, so no tax is due on the gift of the car from your sister, he said.
Email your questions to Ask@NJMoneyHelp.com.
Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.
"car" - Google News
November 26, 2021 at 09:30AM
https://ift.tt/3CSF1FY
How can we retitle a car in N.J. from Pennsylvania? - nj.com
"car" - Google News
https://ift.tt/2SUDZWE
https://ift.tt/3aT1Mvb
Bagikan Berita Ini
0 Response to "How can we retitle a car in N.J. from Pennsylvania? - nj.com"
Post a Comment