Immediately buying from a friend

[gschom]

There is no legal way to do this, without paying sales tax a second time.

Putting two different names on the title has legal consequences that you should make sure you understand. If you had the truck, with his name on the title, and something happened, he would be legally and financially liable just like any other vehicle owner would be.

If I were the dealer, if your friend doesn't want the truck, there are 180,000 people in line in front of you. He shouldn't sell it to you even with ADM.

This is a great point and not something I had considered.

Totally agree that the dealer has little to no incentive to work with us here, from a financial point of view.

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[gschom]

Not knowing if CT charges lease tax on monthly vs. entire amount; if monthly, the best way is get a 3rd party lease company like Ally or US Bank.

Then have your friend buy out the lease.

I’m not sure either. This is an interesting idea but I do think it would just be too many hoops to jump through for both me and my friend.

 

[gschom]

Just wanted to say thank you everyone for the replies and suggestions! This is my first time interacting with this community and I’m blown away by the thoughtfulness and responsiveness!

 

[TaxmanHog]

if your friend treats the cash you are giving them as a "gift" which they choose to use on the truck and then turns around and sells the truck to you for $1, you would only have to pay tax on the sale price (the $1), right?

Note: I am not an accountant or tax professional and my advice should be taken with a large grain of salt.

An Estate & Gift tax situation arises, I would NOT go down this road, though not known nor should we get detailed here but it might be moot or inconsequential dollar wise, but there are reporting requirements to stay out of hot water

CASH, as in actual dollar bills, will trigger a CTR, bring a certified check of funds drawn from your bank account.

Discuss the dilemma with the dealer, you might end up with a modest ADM just so you can conduct a clean cash purchase in your name alone, one round of sales tax and done legally. ADM might go as high as the equivalent value of CT sales tax.

 

[Amps]

you might end up with a modest ADM just so you can conduct a clean cash purchase in your name alone, one round of sales tax and done legally. ADM might go as high as the equivalent value of CT sales tax.

the dealer has little to no incentive to work with us here, from a financial point of view.

The dealer also has a bit of reputational risk here with customers who have been in line for 14 months. Or, the really good customer who they told would get the first abandoned order.

If you qualify for the tax credit getting the truck through an arm's-length dealer transaction, that's an easy psychological $7500 to help offset ADM. Any other way, you'll abandon the federal tax credit.

 

[gschom]

An Estate & Gift tax situation arises, I would NOT go down this road, though not known nor should we get detailed here but it might be moot or inconsequential dollar wise, but there are reporting requirements to stay out of hot water

CASH, as in actual dollar bills, will trigger a CTR, bring a certified check of funds drawn from your bank account.

Discuss the dilemma with the dealer, you might end up with a modest ADM just so you can conduct a clean cash purchase in your name alone, one round of sales tax and done legally. ADM might go as high as the equivalent value of CT sales tax.

I think this is good advice, and probably the path of least resistance.

My friend and I will first try to work with the dealer to simplify things and just put the truck in my name alone. I may potentially pay a little more than the sticker price, but hopefully it won’t be much.

If they do suggest a markup higher than sales tax, I see 2 options at this time.

1. I put these foolish ambitions to rest and some other lucky soul gets their platinum lightning early .

2. My friend buys the truck with the money I’ve provided to him and I pay sales tax twice to get it into my name. As sad as that is.

I did some research on the “2 names on the title” trick, but it seems like removing my friend would still trigger sales tax in CT (unless he and I were family). So there’s no real benefit to that in our scenario unfortunately.

 

[EonLightning]

One option may be to put both of your names on the original title, and then have him remove his.

That way the dealer shows the vehicle being titled in the reservation holders name.

I would check with the dmv to make sure there are not pitfalls if you elect this option

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[bryan995]

I think this is good advice, and probably the path of least resistance.

My friend and I will first try to work with the dealer to simplify things and just put the truck in my name alone. I may potentially pay a little more than the sticker price, but hopefully it won’t be much.

If they do suggest a markup higher than sales tax, I will just have to bite the bullet and pay tax 2x, as sad as


I think this is good advice, and probably the path of least resistance.

My friend and I will first try to work with the dealer to simplify things and just put the truck in my name alone. I may potentially pay a little more than the sticker price, but hopefully it won’t be much.

If they do suggest a markup higher than sales tax, I see 2 options at this time.

1. I put these foolish ambitions to rest and some other lucky soul gets their platinum lightning early .

2. My friend buys the truck with the money I’ve provided to him and I pay sales tax twice to get it into my name. As sad as that is.

I did some research on the “2 names on the title” trick, but it seems like removing my friend would still trigger sales tax in CT (unless he and I were family). So there’s no real benefit to that in our scenario unfortunately.

Then there is only one remaining solution.

marry your friend.

 

[GDN]

Another thought, if you were to go the route and title it with both names, you could get into an insurance issue so that the insurance policy also requires both names on the policy. This would likely be required by a lien holder if there were one.

 

[broncoaz]

The dealership knows that there are plenty of people willing to pay the ADM, so they have no reason to let you do anything other than have your buddy buy it and then resell to you. Your buddy can also collect the $7500 tax credit if he “didn’t buy it for resale”. I would have him buy it and retain it for a month on paper so he could collect the tax credit legitimately.

I’m the fleet manager for a company with 140 trucks, my dealer won’t even let me buy my reservation in the name of my employer since I’m not an company officer. I went in to ask and they told me my only two options were to buy it in my name or walk and let them sell it for ADM. I’m a long time customer there.

 

[PiMatrix]

I'm not an accountant but here's an idea. Does your friend have a company, e.g. an LLC? Join him as a partner, you purchase the car with LLC funds. Could work even if the Truck is shared with some personal use. If so check this out -

https://www.northwestregisteredagent.com/llc/car

 

[gschom]

The dealership knows that there are plenty of people willing to pay the ADM, so they have no reason to let you do anything other than have your buddy buy it and then resell to you. Your buddy can also collect the $7500 tax credit if he “didn’t buy it for resale”. I would have him buy it and retain it for a month on paper so he could collect the tax credit legitimately.

I’m the fleet manager for a company with 140 trucks, my dealer won’t even let me buy my reservation in the name of my employer since I’m not an company officer. I went in to ask and they told me my only two options were to buy it in my name or walk and let them sell it for ADM. I’m a long time customer there.

The way I see it, the dealer can make some extra money by charging me a small ADM (they let me buy the truck directly), or I can pay the state sales tax instead if they try to gouge me (my friend buys the truck and I buy it off of him). So I think there is a little bit of an incentive to work with me here.

Still holding out hope they don’t charge an ADM at all though.

 

[gschom]

I'm not an accountant but here's an idea. Does your friend have a company, e.g. an LLC? Join him as a partner, you purchase the car with LLC funds. Could work even if the Truck is shared with some personal use. If so check this out -

https://www.northwestregisteredagent.com/llc/car

That’s an interesting suggestion, but unfortunately he does not.

 

[bmwhitetx]

One other item is that Ford wanted dealers to make buyers sign a 1-year no-resell statement. Lots of opinions here on that subject but the dealer may go that route if you let him know your plan.

 

[gschom]

One other item is that Ford wanted dealers to make buyers sign a 1-year no-resell statement. Lots of opinions here on that subject but the dealer may go that route if you let him know your plan.

Thanks. I heard dealers weren’t really enforcing it but yea this is a valid concern if I reveal my hand here.

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