As of 2019, a gift tax payment is required if the fair market value of the vehicle is more than $15,000 for a single individual or $30,000 for a married couple. For example, if an individual wanted to give each of her four children $13,000, she would not have to pay taxes on any of it. When you give someone a vehicle, you must sign over the title to that person; likewise, if someone gives you a car, make sure you get the properly signed title. Since gifting a car is a bit different than simply buying a car for yourself, make sure you do the following before putting a big bow on a vehicle and gifting it to a loved one. If you give more than $15,000 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you need to file a gift tax return. It could be as easy as writing the word "gift" on the title or bill of sale. For more information about motor vehicle taxes, please call the Illinois Department of Revenue at 800-732-8866 or 217-782-3336. No maximum amount of gifts that donors can give exist. Gifting a vehicle means no sales tax. Writing a bill of sale for gifting a car is not complicated, and the seller can usually use a bill of sale template found online. The giftee may have to pay a gift tax. This applies to buying or selling a car, but it also applies to giving one as a gift to a family member, or when inheriting a vehicle. Fees are sometimes, although not always, involved. Car Title Transfer Fees in Illinois. If this was a true "gift" from a friend or relative, you would not have to report it or pay tax on your Federal or state tax return. The good news? Donors are responsible for paying gift taxes; however, the IRS has an annual exclusion rule. To finalize a process of car title transfer in Illinois, motorists need to provide a payment for the applicable fees as the ultimate step of the procedure. Is gifting a vehicle something you’re looking to do, but you’re not sure what methods to take to do so, continue reading and gather … Gifting a car to another person almost always requires a bill of sale verifying that the car is being given as a gift. That doesn’t mean you have to pay a gift tax. When you go to register the vehicle in your name, you may have to pay a fee or tax based on the value of the vehicle (unusual for gifts). 3. If you exceed your annual gift tax exclusion limit by giving more than $15,000.00 to a single individual, the amount of the gift in excess of the annual limit will reduce your lifetime estate and gift tax exclusion limits for both federal estate and gift tax and Illinois estate tax. Where to Apply Applications may be obtained from most Secretary of State facilities in Illinois or by call-ing 800-252-8980 or 312-793-1010. When deciding to gift a vehicle, there are two initial aspects to this which are car insurance and vehicle ownership. 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