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    Chesterrn123's Avatar
    Chesterrn123 Posts: 1, Reputation: 1
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    #1

    Aug 3, 2013, 06:10 AM
    estate settlement/purchased from estate vs inherited
    My mother recently passed away. I live in New York state and I have three siblings. My mother left us some cash and an automobile. I am taking the automobile and my siblings are dividing up the cash. The amount of cash each sibling will receive is approximately equal to the value of the automobile. Under these circumstances, is have I "inheritance this car", which would mean I do not have to pay sales tax on it or have I "purchased it from the estate", in which case sales tax would need to be paid. Please help me! I don't want to pay sales tax unnecessarily nor do I want to commit a crime.
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,505, Reputation: 4600
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    #2

    Aug 3, 2013, 07:25 AM
    You say your mother "left" you and your siblings cash/car. By Will?

    I'm also in NY.
    ScottGem's Avatar
    ScottGem Posts: 64,970, Reputation: 6056
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    #3

    Aug 3, 2013, 07:35 AM
    If the car was an asset of the estate and you were given the car as part of the estate settlement, then its your inheritance. If you paid the estate the value of the car and that money was then distributed to heirs then the estate would owe sales tax if applicable.
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #4

    Aug 3, 2013, 07:49 AM
    Scott is right. I suspect the idea is that if a third party, not an heir, purchased the car from the estate, it would be taxable. Or if an heir paid the estate for an asset, again probably taxable.

    But to be sure, you should review the tax statute and regulations.
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,505, Reputation: 4600
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    #5

    Aug 3, 2013, 07:58 AM
    For starters NYS DMV is going to collect sales tax unless/until an Executor of the estate issues a statement that the car was part of an estate and passed down, not purchased.

    That's why I asked about a Will - or who is managing the estate.

    In my case my husband's Will provided that documentation for me. I had to give his daughter a statement (I was the Executor) concerning the car which she inherited.
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #6

    Aug 3, 2013, 08:13 AM
    Quote Originally Posted by JudyKayTee View Post
    For starters NYS DMV is going to collect sales tax ....
    How can DMV collect a tax without knowing a sales price?

    They are going to be presented with the title (or bill of sale), signed off by the PR. OP should also bring
    • a certified copy of the PR's letters of administration;
    • Or, as in your experience, a copy of the will along with the death certificate;
    • Or, if NYS allows "small estate" probate procedures, a "small estate" affidavit also with with the death certificate.
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,505, Reputation: 4600
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    #7

    Aug 3, 2013, 09:28 AM
    "How can DMV collect a tax without knowing a sales price?

    They are going to be presented with the title (or bill of sale), signed off by the PR. OP should also bring
    a certified copy of the PR's letters of administration;
    Or, as in your experience, a copy of the will along with the death certificate;
    Or, if NYS allows "small estate" probate procedures, a "small estate" affidavit also with with the death certificate. "

    DMV doesn't collect sales tax on a transfer due to a gift, divorce, estate so, no, DMV doesn't need to know a value in order to collect taxes because there ARE no taxes. Sales tax is collected when you purchase something. I see no purchase.

    That's why the paperwork to PROVE gift, etc.

    Why would an estate write a bill of sale under these circumstances?
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #8

    Aug 3, 2013, 10:17 AM
    Quote Originally Posted by JudyKayTee View Post
    Quote Originally Posted by AK Lawyer
    How can DMV collect a tax without knowing a sales price?

    They are going to be presented with the title (or bill of sale), signed off by the PR. OP should also bring
    a certified copy of the PR's letters of administration;
    Or, as in your experience, a copy of the will along with the death certificate;
    Or, if NYS allows "small estate" probate procedures, a "small estate" affidavit also with with the death certificate.
    DMV doesn't collect sales tax on a transfer due to a gift, divorce, estate so, no, DMV doesn't need to know a value in order to collect taxes because there ARE no taxes. Sales tax is collected when you purchase something. I see no purchase.

    That's why the paperwork to PROVE gift, etc.

    Why would an estate write a bill of sale under these circumstances?
    I agree, that if there was no sale there is no tax.

    But you suggested a necessity of proving to the DMV that there was no sale.
    Quote Originally Posted by JudyKayTee
    For starters NYS DMV is going to collect sales tax unless/until an Executor of the estate issues a statement that the car was part of an estate and passed down, not purchased.
    Did you forget? That's why I ask how they can tax the transaction in the absence of proof of a sales price.

    And if the estate transfers the vehicle to OP, it needs to also give OP documentation, in the form of a title transfer or "bill-of-sale" (not to be confused with something suggesting an actual sale.)
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,505, Reputation: 4600
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    #9

    Aug 3, 2013, 10:25 AM
    "I agree, that if there was no sale there is no tax.

    But you suggested a necessity of proving to the DMV that there was no sale.
    Quote:
    Originally Posted by JudyKayTee
    For starters NYS DMV is going to collect sales tax unless/until an Executor of the estate issues a statement that the car was part of an estate and passed down, not purchased.

    Did you forget? That's why I ask how they can tax the transaction in the absence of proof of a sales price.

    And if the estate transfers the vehicle to OP, it needs to also give OP documentation, in the form of a title transfer or "bill-of-sale" (not to be confused with something suggesting an actual sale.)"

    Yes, the new owner proves to DMV that this was not a sale; therefore, there is no sales tax. DMV isn't going to tax if there isn't a sale. DMV in NY has a policy of requesting proof. You think no proof is needed? I can accept that.

    And, no, I didn't forget. I also did nothing to deserve your rudeness.

    You don't agree, fine. Whether forgot what I posted is inappropriate.

    I haven't forgotten what I posted. I haven't forgotten what you posted

    Apparently neither have you.
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #10

    Aug 3, 2013, 10:34 AM
    I didn't mean to seem rude. That was not my intent. Sorry.

    I guess, under these special circumstances "bill of sale" would be a poor choice of phrase. Usually, if the title can be found a BOS is unnecessary. But, if not, perhaps "Bill of Distribution by Decedent's Personal Representative" might be more appropriate.

    The idea is that for real estate distribution is done by "deed of distribution" or something titled similarly. The equivalent of a deed, for personal property, is a bill of sale. I hope this is clearer.

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