re: Paying taxes on a gifted privately sold vehicle

quote:

---

I'm betting KBB at the time of the gift may still be less than what I'm selling for now. However, if my parents had sold it privately at the time of gift, then they'd have gotten more than I will now.

Is this something I need to worry about with the IRS/DMV looking into?

---

DMV is only going to care about the sales price when you sell it, and that they get the sales tax out of it.

Basis must be proved by the seller in the event of an IRS audit. The IRS initial assumption is your basis in the vehicle is zero, and you have to prove otherwise. You can use KBB value at time of gift as proof and be fine.

However, if you want to use a higher value, you are going to have to be able to prove it. Simply saying "my parents could have sold it for more" is not going to cut it. You need something more concrete. An appraisal will work. But I don't know if you will find someone willing to do an appraisal after the fact

KBB is supposed to be an updated reflection of actual values. It seems odd to me that KBB would be off by such a big margin on a vehicle.