I helped my 18 y/o buy a new car 2 years ago, thinking I would get a lower interest rate. I want to transfer the car to her name. She has paid all of the payments ahead of time. She deserves to build her credit on this. Toyota Finacial wants to charge $200 to transfer title. She asked her bank for a loan, decision pending. What's cheaper? Do I pay taxes as a seller in Texas? Can we just transfer and avoid taxes? It's always been her car, I made an error. What's the best/cheapest way out of this for both my daughter and I?
If the transfer to your daughter is a gift, the tax would be only $10.00. Effective as of September 1, 2009, Section 152.025 of the Tax Code was amended to read as follows:
(a) A tax is imposed on the recipient of a gift of a motor vehicle. This section applies only if the person receiving the motor vehicle:
(1) receives the vehicle from:
(A) the person's:
(ii) parent or stepparent;
(iii) grandparent or grandchild;
(iv) child or stepchild;
(v) sibling; or
(vi) guardian; or
(B) a decedent's estate; or
(2) is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt organization under Section 501(c)(3) of that code, and the vehicle will be used for the purposes of the organization.
(b) The tax is $10. Tex. Tax Code Ann. § 152.025