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Need Advice: Private Party Car Sale (archive)

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Posted by Jayhox on February 27, 2001 at 09:22:39:

All of my car deals have always been through dealerships. I may be selling my car and purchasing an E36 M3 from another individual (no dealership involved). In two separate transactions, what are the tax implications:

1) When I sell my car, I will need to pay off the buyout amount with BMW Financial. Is there tax above the buyout amount stated by BMW? Do I pay any tax on the amount I receive for the sale of my car to a private individual?

2) When I purchase the M3 from a separate individual, do I report the sale amount to the state/fed and pay tax on that amount? Is there any "wash" between the amount I sell my car for and the amount of the car I purchase?

I have traded/leased my last several cars and cannot remember how the private sale works. I know there is some sort of tax advantage if you can work a trade-in with a dealer. What am I about to face?

'99 2.3 Atlanta Blue/Navy/Beige
e-mails are welcome
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