They want to 'donate' the car to me instead of sell it?

Question

got an offer from someone who wants to sell a car but they offered to donate it to me to help with taxes. I know they can benefit by not having to do taxes and maybe even I can do the same thing, but what are the downfalls of this? Pros and cons of them donating the car to me for $$$ rather than me just buying it?

Is this even legal? help.

Answer 1

Unless you're a registered charity, donating it to you will do the seller no good.  It also won't do you any good if what they have in mind to to actually sell it to you but indicate it was a gift to save you at transfer time.

Most states will base fees for transfer on either the sellers price stated, or the fair market value of the vehicle, which ever is the higher amount, so it won't do you any good either.

If you do live in a state where they don't take fair market value, you are scamming the state by doing this.  I wouldn't.  Let your conscience guide you.

Answer 2

If you are not a 501(c) charity, then they don't get to deduct the "donation" of the car.

If they "give" you the car, and you don't pay them any money or just a token amount, that will cut down on the taxes you pay when you register the car.

The negative part comes in if you pay more than is being claimed. That is tax evasion.

Remember, a donation is usually a one-way transaction. They give you the car, they don't get any money.

It sounds a lot like they are trying to scam the system and/or you.