illinois tax issue on rv trade in for car?

suade907 wrote:
Hi guys, I live in illinois and just traded my rv for a subaru. I was shocked when the dealer told me that they cannot offer me a tax break on the value of the rv. I'm not so sure I believe them and cant find any info online. Does anyone on here know the state law on trading rv's for autos? Should I have got my tax savings?
Thanks

Found this on searching IDR website, from form ST 566:

Describe the trade-in, if any
If you did not claim a qualified trade
in, skip this section and go to
Section 5.
If you claimed a qualified trade
in, enter the type of item traded
in (e.g., automobile, truck, airplane, boat, trailer). Next, enter the appropriate identification number, year, make, body style, and
model of the trade in.
What is a qualified trade-in?
A qualified trade in is an item
that the purchaser gives you to reduce the selling price (in
part or in full) of the item sold;
that you are allowed to subtract from the selling price; and
that you are in the business of selling.
You are “in the business of selling” a particular kind of item if you
hold yourself out to the public as being engaged in (or habitually
engage in) selling such items.
Example:
You may claim the trade
in of a boat on an auto if you
are in the business of selling
both
boats and autos.
However, you may not claim the trade
in of a boat on an auto if
you are in the business of selling
only autos.

dodge guy wrote:
A trade in is a trade in! the amount is deducted from the sale price.

That is not true in most states. If you were to trade a refrigerator or your dog you would not get any tax consideration. In many states, the trade must be licensed as a motor vehicle to qualify for tax treatment. That would leave out things like boats, travel trailers etc. In other states, how the vehicle was titled is key. It would have to have been titled in your name to qualify. This was a big issue in Texas since leased vehicles are registered in the lessor's name. You couldn't legally trade a leased vehicle in and pay taxes only on the difference unless you traded it for another vehicle leased through the same bank. Tax law is always more complicated than it seems. Why do you think there are hundreds of thousands of people working for the IRS and state departments of revenue and an equal number of tax accountants, tax preparers, tax attorneys and the like?

Tax on a private party transaction uses RUT 50

Tax on private party transactions

Just used this last June on our new to us 2000 Suncruiser.

Not sure about buying from dealer.

I lived in Illinois for 18 years. They never met a tax they didn't like. Hope something works out for you.

First off I thought IDNR was the Illinois Department of Natural Resources, which would have to do with conservation wouldn't it? The DMV in Illinois that handles title transfers and such is still the Secretary of State's Office isn't it, you know Jesse White?

Anyway, I didn't know anything actually changed. I thought you still paid tax just on the trade difference when you were dealing with a dealer. I know when you are dealing "private party" it gets a little confusing on taxes.

I could be all wrong reference Illinois because I haven't purchased a vehicle for several months in that state.

If I understand your issue, you expected the trade in value of the RV to lower the price of the car, right? To be taxed on the difference? RV or not, Illinois no longer allows that.

The IL Dept of Rev has changed the way they tax, without IL legislature making the change. I've experienced this as well.

Here's how it works: IL taxes your new vehicle (or used) on the value deemed fair market value by the IDNR. In other words, if the Subaru was new, it was taxed on the MSRP...NOT what you paid...trade in or no, if it cost 30,000 MSRP, and you paid 28,000, you are taxed on 30,000.

Case in point: I bought a 1967 Camaro for 11,500. IDNR says its worth 25,000 (without ever seeing it or asking to see it). They wanted to tax me 1,000 plus penalties because I mis-represented the value. WRONG. It was rusty, non-restored, but they taxed it as if it was a showroom new car. Took a year to fight it. I won.

Bottom line for IL folks: IL is BROKE (ranked #50 out of 50 states for debt). Many think CA is worse, but they bring in cash that IL doesn't. IDNR changed the rules w/o notifying anyone...its wrong and hopefully will be fixed.

I am a little dense here this am. What figure/amount did you pay tax on?

drive down to the local DMV and ask the pro.they can even figure up the tax if you get a nice clerk.

A trade in is a trade in! the amount is deducted from the sale price.

Go to CyberdriveIllinois If the info isn't there, there should be a number to call.