Dealership wants to keep my maverick

[OXHB619]

How does the tax situation work if someone sells on a service like Carvana? Is there a sale tax or something?

You would be responsible for reporting it as a capital gain on your taxes. What you get paid (including if you have a loan, what they send to the bank ) , subtract your OTD price and that is what the gubermint bases your profit as for Capital Gains.

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[AutobahnSHO]

How does the tax situation work if someone sells on a service like Carvana? Is there a sale tax or something?

Not for the seller. Carvana buys it and pays applicable sales taxes. Carvana sells it and buyer pays applicable sales taxes.

The taxes mentioned are "capital gains" and many consumers don't even know what that means.

 

[Earle]

I was offed 5K at the dealer. I told them give me 20K then I would except the deal. They wouldn’t except my offer

 

[Ford Maverick Maniac]

How does the tax situation work if someone sells on a service like Carvana? Is there a sale tax or something?

Any time title changes, like selling to Carvana, how much you receive gets reported to the gov as part of the transaction. You will get a 1099 from Carvana by Jan 31 for the full amount of the sale (example $30k). If you bought the truck for $25k out the door with sales tax and license fees, you will be taxed at your regular income tax rate on the $5k profit. So if your Fed income is taxed at 30%, you have to give back $1500 to the Feds. State income tax could be another 10% of the profit if your state has state income taxes.

If you are in a high tax state like CA, it could be 40% ($2,000 of the $5,000 profit) has to set aside to give back by April 15. A lot of people spend all the money and have to pay penalties and big interest charges if they can't pay what they owe the gov by April 15.

Again, my opinion is you will make a lot more money by saving gas over the years vs a short term gain that usually gets spent and triggers a tax hit.

 

[Ford Motor Company]

They just want to make some more money, I would keep it, LOVE mine.

Glad to hear you're loving your Maverick!

 

[Fletch_KC]

Any time title changes, like selling to Carvana, how much you receive gets reported to the gov as part of the transaction. You will get a 1099 from Carvana by Jan 31 for the full amount of the sale (example $30k). If you bought the truck for $25k out the door with sales tax and license fees, you will be taxed at your regular income tax rate on the $5k profit. So if your Fed income is taxed at 30%, you have to give back $1500 to the Feds. State income tax could be another 10% of the profit if your state has state income taxes.

If you are in a high tax state like CA, it could be 40% ($2,000 of the $5,000 profit) has to set aside to give back by April 15. A lot of people spend all the money and have to pay penalties and big interest charges if they can't pay what they owe the gov by April 15.

Again, my opinion is you will make a lot more money by saving gas over the years vs a short term gain that usually gets spent and triggers a tax hit.

Good info. What if I sell (or buy) from a private party... say from Craigslist or whatever?

It just seem like, somewhere along the line, someone would have to pay a sales tax...?

 

[jsus]

Good info. What if I sell (or buy) from a private party... say from Craigslist or whatever?

It just seem like, somewhere along the line, someone would have to pay a sales tax...?

Sales tax is charged to the end user by the respective (state) government entity. Typically, when you go to register a vehicle from a private party sale, you, the buyer, is required to pay the appropriate sales taxes. Some states also require you to do this for a new vehicle from a dealer; others require the dealer to collect and remit sales tax on your behalf.

Dealers don't pay sales tax when they buy a vehicle from you, for the same reason Costco doesn't pay sales tax on their inventory. Merchants don't pay sales tax on products for resale, only on what they use internally.

 

[JennyJoannSuebeeMcNash]

My maverick came in and the dealer offered me 2k to walk away from the truck so they can resell it for more. They aren't adding anything on to the MSRP on me. And I have to wait for Ford to release the recall for the brake lights so I can take it home. I'm not going to walk away. Just wondering what some of your thoughts were??

Do what the dealership does to everyone else - tell them you'll take it for $10K more, which is what they'll attempt to get for it on their lot.

 

[Ford Maverick Maniac]

Good info. What if I sell (or buy) from a private party... say from Craigslist or whatever?

It just seem like, somewhere along the line, someone would have to pay a sales tax...?

Jsus is right. Transferring the title triggers 2 things:
1) Buyer pays Sales Tax
2) Seller pays Capital Gains tax on the profit by April 15 as part of yor annual tax return.

If you spent the profit and ask the gov for an IOU on the tax you owe when you file on April 15, you will also have to pay a big penalty and 10% interest.

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