What steps do I need to take to gift a car to my son in Texas?
I am in the process of giving my son a 1999 Lincoln Towncar. What do we need to do to transfer the car to him?
Here is a simple breakdown of the process in Texas to transfer ownership of the vehicle to your son as a gift:
- You (the giver) and your son (the recipient) will both need to fill out and sign the "Assignment of Title" section on the vehicle's title.
- You will both need to fill out and sign the 130-U form (which is the title and registration application) available to print on the state's website.
- You will both need to fill out and sign the "Gift Transfer" 14-317 form available to print on the state's website.
- The recipient will need to insure the vehicle on his own policy unless he is a member of the giver's household. If your son still lives with you, then he and the vehicle can be added to your policy or he can insure the vehicle on his own.
- You and/or your son will need to submit those documents in person to your county tax office and pay the $10 gift tax.
If the car is being purchased by you and then given to your son as a gift (rather than you already owning the car and gifting to him, as in the scenario outlined above), there are a few steps you will need to take during the purchasing process:
- If the car is being paid for in cash and the giver is not on the title, the giver will need to secure a picture of the recipient's driver's license and current insurance information.
- If the car is worth over $10K in value, it is likely that the dealer will fill out an IRS cash reporting form, in which case the giver's driver's license will be required by law. Some dealers may also ask that the giver complete a five-line security report for purposes of preventing money laundering.
- Some states require the giver to fill out additional special forms, like an “Affidavit of Motor Vehicle Gift Transfer” and most tax forms.
- The recipient will need to insure the vehicle on his own policy unless he is a member of your household. If he still lives with the giver, then he and the vehicle can be added to your policy or he can insure the vehicle on his own
After this process is complete then your son will be the titled owner of the vehicle. You can also contact the Texas DMV with any questions on the process.