trade in and tax question - BMW 1 Series Coupe Forum / 1 Series Convertible Forum (1M / tii / 135i / 128i / Coupe / Cabrio / Hatchback) (BMW E82 E88 128i 130i 135i)

wtfmateim65 · 09-03-2008, 06:24 PM

hello,

quick question: if I were to trade in my M3 to a dealer for order of a 135i for $30k, and say the 135 was 37k, would i pay tax on the difference,7k or on the whole 37k? i've heard some people say this but wanted to make sure or if it just depended on the dealer or what.

thanks for the insight.

135i_TT · 09-03-2008, 06:32 PM

The dealer will give you 30k for your M3 but the 135i is 37k?

If thats the case, yes, you will have to pay the 7k difference, sometimes they can add the difference to the loan but usually they dont.

wtfmateim65 · 09-03-2008, 06:40 PM

i know i will have to pay the 7k difference, but i am asking will i have to pay tax on $7k or the full $37k?

mistermojorizin · 09-03-2008, 06:49 PM

Quote:

Originally Posted by wtfmateim65

hello,

quick question: if I were to trade in my M3 to a dealer for order of a 135i for $30k, and say the 135 was 37k, would i pay tax on the difference,7k or on the whole 37k? i've heard some people say this but wanted to make sure or if it just depended on the dealer or what.

thanks for the insight.

in CA you would pay tax on the full price.

BeamerDreamer · 09-03-2008, 06:51 PM

If the sale price on the 135i is $37k, you would have to pay sales tax on $37k. The sales tax is based on the sales price of the car not the difference in the amount you would owe.

Alow · 09-03-2008, 06:52 PM

Quote:

Originally Posted by BeamerDreamer

If the sale price on the 135i is $37k, you would have to pay sales tax on $37k. The sales tax is based on the sales price of the car not the difference in the amount you would owe.

Must be a CA thing. In MO, you pay sales tax on the difference.

NoZSP · 09-03-2008, 06:53 PM

At least that is how it works in my state (WA). Not sure about other states or countries.

jeff · 09-03-2008, 07:02 PM

Georgia and Alabama both its the difference ($7K) That is one reason the dealer always mentions as the reason to take their trade in offer.

wtfmateim65 · 09-03-2008, 07:09 PM

well that sucks. i guess ill call a dealer and confirm thats how it is in CA. i really hope thats wrong haha. i'd love to save 2k on tax.

EINSER M · 09-03-2008, 07:30 PM

yah CA state board of equalization gets their hands on everything and yet the state is STILL BROKE! you dont get the benefit of the trade in allowance in CA, i looked into that already

tkbr0wn · 09-03-2008, 07:53 PM

Wow, that sucks. In GA, on a high-end car, its usually just about a wash on trading in a car vs. selling it outright because of the Sales Tax advantage. It seems like you would be A LOT better off selling the car on your own in CA.

Call · 09-03-2008, 08:00 PM

Usually, if I do not have a trade-in I'll go buy a car to trade from an individual since here in GA no sales tax when the sale is between individuals.

Last year I purchased a MINI Cooper JCW from an individual for $27K with about 1400 miles on it; then, the same day I traded for a 335i...they gave me $30K in trade. That's $2K in profit plus another $2100 in sales tax savings (7% in GA)...not bad for a days work.

Also, purchased a MCS from an individual in Nebraska for $14K, hauling bill was $500, sold $2500 worth of parts off of it (returning it to stock), took it in for 24K mile service and had almost $1500 worth of work done free. When I went back to the dealer two days later I traded it in for a new MCS Cabrio MSRP $32K, trade-in $19K. Made $7K profit plus $1330 savings in sales tax...total $8330 savings...not bad for two or three days work. And three people are happy, the individual, me and the dealer:wink:

Play your cards right...in some states you can't buy from an individual and dodge the tax but in many you can.

Cakk

wtfmateim65 · 09-03-2008, 08:13 PM

smart guy right there ^^^ but yeah CA is hell for taxes no such luck here

09-03-2008, 06:24 PM	#1
wtfmateim65 Second Lieutenant Drives: AW 92 335i JB4 Join Date: Sep 2008 Location: Irvine Posts: 243 iTrader: (2)	trade in and tax question hello, quick question: if I were to trade in my M3 to a dealer for order of a 135i for $30k, and say the 135 was 37k, would i pay tax on the difference,7k or on the whole 37k? i've heard some people say this but wanted to make sure or if it just depended on the dealer or what. thanks for the insight.
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09-03-2008, 06:32 PM	#2
135i_TT 1Addict, and proud Drives: 2009 AW 135i M-Sport Join Date: Jun 2008 Location: San Antonio, TX Posts: 1,436 iTrader: (0) Garage List 2009 BMW 135i ZMP ( ... [0.00] 2006 VW Jetta TDI ( ... [0.00]	The dealer will give you 30k for your M3 but the 135i is 37k? If thats the case, yes, you will have to pay the 7k difference, sometimes they can add the difference to the loan but usually they dont. __________________ BMW AW 135i ZMP:6mt,Coral Red Leather,Silver Matte Trim,Heated Front Seats,I-Drive,HD Radio,Ipod/Usb,Comf.Acces www.wix.com/TT135i/Moi

09-03-2008, 06:53 PM	#7
NoZSP New Member Drives: Join Date: Aug 2008 Posts: 24 iTrader: (0)	Only on the difference... At least that is how it works in my state (WA). Not sure about other states or countries.

09-03-2008, 07:30 PM	#10
EINSER M Brigadier General Drives: 2011 E82 1M Join Date: May 2006 Location: 34.1064° N, 117.5922° W, 300m altitude Posts: 4,403 iTrader: (29) Garage List 2011 E82 1M \| CURRENT [3.84] 2012 E82 135 \| CURRENT [2.00] 2011 E90 335 \| CURRENT [5.00] 2006 E60 550 \| CURRENT [0.00] 2007 E85 Z4M\| SOLD [1.50] 2003 E53 X5 4.6is S ... [4.50] 2008 E92 328 \| SOLD [0.00] 2008 E82 135 \| SOLD [0.00] 2008 E90 335 \| SOLD [0.00] 2003 E46 M3 \| SOLD [3.75] 2006 E90 330 \| SOLD [5.00] 2003 E46 330ZHP \| SOLD [0.00]	yah CA state board of equalization gets their hands on everything and yet the state is STILL BROKE! you dont get the benefit of the trade in allowance in CA, i looked into that already __________________ 2011 E82 1M AW \| 419 of 740 CLICK HERE: EINSER M's Темникова E82 AW 1M build thread

09-03-2008, 07:53 PM	#11
tkbr0wn Major Drives: 1M BSM (297 of 740) Join Date: Jun 2008 Location: Atlanta Posts: 1,213 iTrader: (0)	Wow, that sucks. In GA, on a high-end car, its usually just about a wash on trading in a car vs. selling it outright because of the Sales Tax advantage. It seems like you would be A LOT better off selling the car on your own in CA. __________________ ● 135i is gone, 1M BSM #297 ●

09-03-2008, 06:40 PM	#3
wtfmateim65 Second Lieutenant Drives: AW 92 335i JB4 Join Date: Sep 2008 Location: Irvine Posts: 243 iTrader: (2)	i know i will have to pay the 7k difference, but i am asking will i have to pay tax on $7k or the full $37k?

09-03-2008, 06:51 PM	#5
BeamerDreamer Village Idiot Drives: 2008 Mini Cooper S Join Date: May 2008 Location: San Francisco Bay Area Posts: 111 iTrader: (0)	If the sale price on the 135i is $37k, you would have to pay sales tax on $37k. The sales tax is based on the sales price of the car not the difference in the amount you would owe.

09-03-2008, 07:02 PM	#8
jeff Jeff Drives: Join Date: Sep 2008 Posts: 11 iTrader: (0)	Georgia and Alabama both its the difference ($7K) That is one reason the dealer always mentions as the reason to take their trade in offer.

09-03-2008, 07:09 PM	#9
wtfmateim65 Second Lieutenant Drives: AW 92 335i JB4 Join Date: Sep 2008 Location: Irvine Posts: 243 iTrader: (2)	well that sucks. i guess ill call a dealer and confirm thats how it is in CA. i really hope thats wrong haha. i'd love to save 2k on tax.

09-03-2008, 08:00 PM	#12
Call Call Drives: 08 135i, 08 & 07 X5, 05 MCSC Join Date: Jan 2007 Location: Gainesville, GA Posts: 678 iTrader: (0)	Usually, if I do not have a trade-in I'll go buy a car to trade from an individual since here in GA no sales tax when the sale is between individuals. Last year I purchased a MINI Cooper JCW from an individual for $27K with about 1400 miles on it; then, the same day I traded for a 335i...they gave me $30K in trade. That's $2K in profit plus another $2100 in sales tax savings (7% in GA)...not bad for a days work. Also, purchased a MCS from an individual in Nebraska for $14K, hauling bill was $500, sold $2500 worth of parts off of it (returning it to stock), took it in for 24K mile service and had almost $1500 worth of work done free. When I went back to the dealer two days later I traded it in for a new MCS Cabrio MSRP $32K, trade-in $19K. Made $7K profit plus $1330 savings in sales tax...total $8330 savings...not bad for two or three days work. And three people are happy, the individual, me and the dealer:wink: Play your cards right...in some states you can't buy from an individual and dodge the tax but in many you can. Cakk __________________

09-03-2008, 08:13 PM	#13
wtfmateim65 Second Lieutenant Drives: AW 92 335i JB4 Join Date: Sep 2008 Location: Irvine Posts: 243 iTrader: (2)	smart guy right there ^^^ but yeah CA is hell for taxes no such luck here

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