Help me help my parents help me buy a car in Ohio
February 4, 2010 9:50 AM Subscribe
What's the best way for my parents to buy a car on my behalf (in Ohio)?
I'm planning on making an offer on a used (<$10k) car, from a private seller, near my parents' home in Cuyahoga County. Difficulty is, I'm not there right now, and can't be for at least several more weeks. My parents have (generously) offered to assist in conducting the transaction on my behalf.
How can the car end up with my name on the title if I can't be there to buy it in person? Would it be easiest/possible for them to buy it themselves, and then gift it to me? Would that second transaction incur taxes?
I'm planning on making an offer on a used (<$10k) car, from a private seller, near my parents' home in Cuyahoga County. Difficulty is, I'm not there right now, and can't be for at least several more weeks. My parents have (generously) offered to assist in conducting the transaction on my behalf.
How can the car end up with my name on the title if I can't be there to buy it in person? Would it be easiest/possible for them to buy it themselves, and then gift it to me? Would that second transaction incur taxes?
Can you give them power of attorney?
(IANAL, but I have spent more time on the Ohio BMV Web site than any human should in a lifetime.)
posted by chesty_a_arthur at 10:05 AM on February 4, 2010
(IANAL, but I have spent more time on the Ohio BMV Web site than any human should in a lifetime.)
posted by chesty_a_arthur at 10:05 AM on February 4, 2010
There shouldn't be taxes involved if the nominal value of the car is under $10,000, assuming your parents explicitly gift it to you.
Your parents should make sure to get a bill of sale from the person from whom they are buying the car; this essentially gives the car a market value.
They should then, when they transfer title to you, indicate that it is a gift and that its value is under $10,000, which they can prove with the bill of sale.
posted by dfriedman at 10:18 AM on February 4, 2010
Your parents should make sure to get a bill of sale from the person from whom they are buying the car; this essentially gives the car a market value.
They should then, when they transfer title to you, indicate that it is a gift and that its value is under $10,000, which they can prove with the bill of sale.
posted by dfriedman at 10:18 AM on February 4, 2010
IRS publication detailing the tax issues surrounding gifts.
The 2010 limit is $13,000.
posted by dfriedman at 10:32 AM on February 4, 2010
The 2010 limit is $13,000.
posted by dfriedman at 10:32 AM on February 4, 2010
I grew up in Cuyahoga, and am currently nextdoor in Lorain county. You do not need to be there at the time of purchase. The seller can write whatever buyer's name & address he likes on the title at the time he has it notarized. Your parents don't even need to be in the room when the old title is notarzied. The notarizing is just between the seller and the notary.
What you do need to be there for (unless you go the power of attorney route) is the title transfer, at the title bureau, and the subsequent registration at the license bureau.
posted by jon1270 at 10:48 AM on February 4, 2010
What you do need to be there for (unless you go the power of attorney route) is the title transfer, at the title bureau, and the subsequent registration at the license bureau.
posted by jon1270 at 10:48 AM on February 4, 2010
Also, the easiest way to do this would be for the seller to drive the car to your parents' house, remove the plates to take with him, and have your parents drive him home. Assuming the car can be stored out of sight of the road, the title transfer and registration can wait 'til you get there.
posted by jon1270 at 10:55 AM on February 4, 2010
posted by jon1270 at 10:55 AM on February 4, 2010
Also, since I didn't make it clear, the party making the gift to you, in this case, your parents, would be responsible for the taxes. However, since the bill of sale would establish a value within the gift tax exemption limit of $13,000, no taxes would be owed by your parents on their tax return.
They should keep a copy of the bill of sale in the event that they get audited by the IRS or the OH tax authorities.
posted by dfriedman at 11:05 AM on February 4, 2010
They should keep a copy of the bill of sale in the event that they get audited by the IRS or the OH tax authorities.
posted by dfriedman at 11:05 AM on February 4, 2010
This thread is closed to new comments.
Unfortunately, it appears that Ohio is a notary state, i.e. transfers of title must be witnessed by a notary. This probably means that for you to take title to a car, you need to be there in person with appropriate ID.
There are two ways of going about this as far as I can tell. The first would be for your parents to take title to the car and then transfer it to you. In addition to the taxes you mention, this may also trigger either a second round of adminstrative fees for retitling and registering the vehicle, or penalties for not doing so in a timely manner after the first sale.
The second would be to simply buy the car when you show up. If you're worried that the seller isn't going to wait, you can have them put down earnest money indicating that they're going to buy the car on or before a specified date. This can either be included in the final price or an additional option payment. It sounds complicated, but it may be cheaper in the long run. If we were talking about a bigger transaction I'd suggest getting a lawyer, but this is probably something you can work out with the seller on your own. This should probably be done in writing.
Still, it's probably worth a call to the BMV to see if they have any recommendations here.
posted by valkyryn at 10:05 AM on February 4, 2010