sales tax

[ripley999]

Situation: selling a boat registered in IL, sitting in IN, to buyer who will be moving the boat out of state in April (taking possession in Feb). I am working with a broker but I''m still unclear about the sales tax on the sale. Is the buyer solely responsible for sales tax (in the event it is due)? Do I have any tax liability exposure on this sale?
Thanks.

[PaulBl]

You don''t have a problem. It''s not a sellers tax. You close the sale by making sure the money clears the bank and then render the bill of sale to the buyer. It''s always nice to have the broker help get the papers all ready so you both get the papers properly filled out. Once the buyer owns the boat you are a free man with money in your pocket.

In the end the buyer will owe sales tax where they end up. There is usally a time limit before you have to have the boat removed from the state where it is to where it belongs else pay sales tax. If they pay sales tax in another state they can deduct that from what you owe in the new state.

So the seller would want to close the deal then quickly remove the boat else risk having to deal with the IN sales tax. In this case unless he was going to IL they get nothing.

The deal usually ends up so the broker already has his cut before you get yours. Your tax liability is a matter of capital gains income tax and you need to report the income from the sale with your income taxes. You had to know there was a tax for you some place.

[ripley999]

Thanks for help - good to get confirmation (I''ve learned to never assume anything when it comes to taxes). Actually, I''m selling at a small loss to my investment so no capital gains but I don''t think I can deduct a capital loss either since it''s a personal item (i.e., you can''t deduct loss on a car when you sell it). Is this correct?