How do I state the purchase price of a vehicle acquired in a trade?

April 18, 2007 2:36 PM

Wisconsin Car Title Filter: I'm trading my vehicle for another vehicle plus cash. Wondering what to do about titling the new vehicle.

Here's the story. I have a big, gas thirsty SUV that I can't afford to drive and I have someone who wants to trade me a Honda Civic and some cash for the SUV. I'm a bit miffed as what to do when I title the car. On the title and plate application it asks for a purchase price (to levy State and Local Tax), and says it's illegal to understate the purchase price. If I am trading my SUV for the car and cash, I'm not really paying anything for the car, right? What should I put for the purchase price? I don't want to have to answer to the Wisconsin Department of Revenue as to why the purchase price is $0.

posted by ganzhimself to law & government (3 comments total)

Purchase Price = Value of SUV - Cash
posted by SpecialK at 2:51 PM on April 18, 2007

That makes enough sense. I was figuring what amount would be subject to tax though... I mean, there's really no money changing hands. It's about as even of a trade as possible when the cash is considered. The form lists the following fields in order:

Purchase Price $___________
Less trade-in allowance $___________
Amount Subject To Tax $____________
State Sales Tax (amt subject to tax x.05) $_________
Local Sales Tax $_______________
posted by ganzhimself at 3:37 PM on April 18, 2007

The DMV will be on the seller's ass about the tax. They are rabid. Per an agreement with a seller I once wrote a lesser price on the title and they DMV threatened the seller who caved and told them the real selling price, thus screwing us both. They want their taxes so you will have to pay the blue-book value at the very least.
posted by JJ86 at 4:27 PM on April 18, 2007