In 'n Out (vehicle taxes)

# Thread: In 'n Out (vehicle taxes)

1. ## In 'n Out (vehicle taxes)

Hey all,

Yes, I know that the thread title invites some interesting responses, but please refrain.

Could someone explain how an "in 'n out" works? A car salesman tried to explain this to me, but didn't do a very good job! Somehow it involves arranging to purchase a trade-in through a dealer in advance of the trade. My understanding is that there can be some saving on taxes.

Consider this:
My sister wants to get rid of her Toyota Tacoma and buy an Audi Quattro for \$38000. She'll get \$15000 on trade for the truck and pay taxes on the difference between the two vehicles, effectively increasing the value of her trade to \$17125 due to tax savings realized through the trade-in (\$15000 x 14.5% = \$2175). She'd have to sell her truck for \$17125 to match the trade (ie. if I wanted to purchase the truck, I'd pay her \$17125 and then pay \$1284 in tax for a total of \$18409.

The way I understand it, an "in 'n out" could save some money here. Please explain.

2. yup, you got it pretty much.

essentially the tax rules state that taxes are due on the difference in vehicle price from a trade in.

therefore, in your case, only the cash outlay portion (the excess the trade in doesn't cover) is subject to tax. Your savings come from now needing to pay tax on the portion that your trade in covers.

The rules work like this - without the trade-in, the total price would be \$28510 [38000+tax -15000 cash on private sale]

With the trade in, her cos is 26335 [38k -15k +tax]

instant tax savings

3. ## Re: In 'n Out (vehicle taxes)

Originally posted by gspinckney

Consider this:
My sister wants to get rid of her Toyota Tacoma and buy an Audi Quattro for \$38000. She'll get \$15000 on trade for the truck and pay taxes on the difference between the two vehicles, effectively increasing the value of her trade to \$17125 due to tax savings realized through the trade-in (\$15000 x 14.5% = \$2175). She'd have to sell her truck for \$17125 to match the trade (ie. if I wanted to purchase the truck, I'd pay her \$17125 and then pay \$1284 in tax for a total of \$18409.

The way I understand it, an "in 'n out" could save some money here. Please explain.
off the topic but AUDI QUATTRO!!! GOOD TASTE

4. Audi? Can I have one of those??

5. your sister can afford to buy an audi quattro for 38000?? what does she do? is she single?

6. Originally posted by tostitos
your sister can afford to buy an audi quattro for 38000?? what does she do? is she single?
If she was single, I'd never let her near any biker trash.

7. Originally posted by gspinckney
If she was single, I'd never let her near any biker trash.
lol

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