WTF: Government challenging tax paid!
08-01-2008, 12:33 PM
#21
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This could apply to a used boat, car, etc. For me it happened to a car I recently bought and was wondering if it happened to anybody else. I bought a 2000 BMW 540i Sport w/ 78,000 miles in April for $13,500. The guy I bought it from had it for sale for a while and was about to trade it in and I gave him the same price the dealer was offering for trade.
I just got a letter yesterday from the Government challenging me that I paid that amount. They said the NADA retail value was $20K and I owed the difference in tax!
Now I have to PROVE I actually paid that price!
Just wondering if anyone else has had this come up. Seems like the Government doesn't believe there is a problem with the economy and people are still paying top dollar for used items!
Sorry, just had to vent!
I just got a letter yesterday from the Government challenging me that I paid that amount. They said the NADA retail value was $20K and I owed the difference in tax!
Now I have to PROVE I actually paid that price!
Just wondering if anyone else has had this come up. Seems like the Government doesn't believe there is a problem with the economy and people are still paying top dollar for used items!
Sorry, just had to vent!
I live in NJ, and have to deal with this all the time. I think if the state thinks its worth 20k, they should offer to buy it from you for that amount.
We sold a mustang for 3500... they said it was worth 7500. I would love to have been able to get 7500 for it!
08-01-2008, 03:19 PM
#22
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Michael
08-01-2008, 05:33 PM
#23
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Guys,
The law clearly states that as consumers, we pay tax on the value of traded goods, not the purchase price. Now in most cases that is the same or close to the same, so no issue. However, with boats, cars etc, theres gray .....
The gov can tax you/us on the fair market value of anything that we buy for below that market value. Just because you purchase a boat from your "brother" for 5K and its really worth 50K, you cant hide from that 45K in tax.....Now don't get me wrong, i'm with you not against...I just know clearly how this works.....My advice...take pictures of the "item" in the poor condition that I'm sure it is in for that low price that you paid....document receipts whatever, show specific areas that are defective, reasons that it was below value. Just document why you paid below "book" price and you will be fine. For instance, I purchased a boat once very below value, but the reason was that there were "bad" engines in it that had to be thrown away. I just happened to have pictures when the gov checked that showed the boat without motors....get the point ?
The law clearly states that as consumers, we pay tax on the value of traded goods, not the purchase price. Now in most cases that is the same or close to the same, so no issue. However, with boats, cars etc, theres gray .....
The gov can tax you/us on the fair market value of anything that we buy for below that market value. Just because you purchase a boat from your "brother" for 5K and its really worth 50K, you cant hide from that 45K in tax.....Now don't get me wrong, i'm with you not against...I just know clearly how this works.....My advice...take pictures of the "item" in the poor condition that I'm sure it is in for that low price that you paid....document receipts whatever, show specific areas that are defective, reasons that it was below value. Just document why you paid below "book" price and you will be fine. For instance, I purchased a boat once very below value, but the reason was that there were "bad" engines in it that had to be thrown away. I just happened to have pictures when the gov checked that showed the boat without motors....get the point ?
08-01-2008, 05:59 PM
#24
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OK depreciate's A LOT faster. If you were to buy a 2000 model or older in OK, you would pay 0 sales tax.
08-04-2008, 10:29 PM
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I just got a letter in the mail from CA regarding a boat I sold a guy FOUR YEARS AGO. He took delivery in international waters (Canada) and then moved it to Mexico for a period of time and then to CA. I guess he was getting "around" sales tax that way. They want proof from me of all this.
08-04-2008, 10:35 PM
#26
AKA "BAZOOKA JOE"
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08-05-2008, 06:21 AM
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