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Questions re: "in and out" vehicle purchase
Posted on 1/25/16 at 4:52 pm
Posted on 1/25/16 at 4:52 pm
Can someone explain the pros and cons for the buyer, seller and dealership of doing an "in-and-out" to purchase a used vehicle?
I'm the buyer FWIW and this is the only option to purchase the vehicle bc the current owner (business) would have to pay income taxes on a direct sale.
TIA
I'm the buyer FWIW and this is the only option to purchase the vehicle bc the current owner (business) would have to pay income taxes on a direct sale.
TIA
1
Posted on 1/25/16 at 5:37 pm to Golfer2012
In Louisiana the seller gets tax credit for his trade by doing an in and out. If he sold you his car directly to you he wouldn't get credit for it. He would pay tax on the full price of his 'new' car vs only paying tax on the difference between the 'new' car sales price and the trade amount. This only works if he is trading in a car and buying another. The dealer benefits bc they get the sale of the 'new' car and also immediately get rid of the traded in unit, which they might have sent to auction and take a loss on.
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