So does everyone B.S. their bill of sale?

Rushie said:
Thanks for the explanation. I never thought about it before. How is the bill of sale a "public" document? I didn't think anyone saw it other than the buyer and seller and whatever government petty bureaucrat wants to see it. Am I forgetting something?
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As James said, it's public. Like real estate records. The purpose of recording is similar to both real estate and motor vehicle title records. To prove ownership, to help prevent unauthorized sales, to give lenders something they can rely on to know they are secured when they lend. It's what aircraft title and escrow companies look at.

The FAA registry has some additional functions also. That $10 CD also shows 337s for a history of substantial modifications.
 
midlifeflyer said:
As James said, it's public. Like real estate records. The purpose of recording is similar to both real estate and motor vehicle title records. To prove ownership, to help prevent unauthorized sales, to give lenders something they can rely on to know they are secured when they lend. It's what aircraft title and escrow companies look at.
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James331 said:
Its public, pay $5 and you can get every bill of sale for the history of an aircraft

http://aircraft.faa.gov/e.gov/nd/
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Well I'll be.
 
3393RP said:
It takes around 22 pounds of hundred dollar bills to equal one million dollars IIRC. :D

This is the approximately $205 million that was found in the house of Zhenli le Gon, a methamphetamine manufacturer.

YeGon_millions.jpg
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I'll take that tiny stack in front on the right side.
 
midlifeflyer said:
What legal problems? What falsification? I'm really curious what you imagine are the serious consequences of writing, in effect, "I choose not to disclose the full purchase price on a public document if I am not required to." That is quite literally all it means in this context.

if you think it's some weird aviation thing, it's not. The phrase, "$1 and other valuable consideration" (with some variations) has been used for centuries. It's based on a ancient legal formality - concerns that a promise without some kind of stated exchange of value ("consideration") is unenforceable. Its more modern incarnation is still as a statement of "some" value (often used in family transfers if real estate), but more to avoid disclosing the financial details of a transaction on a public document if you are not required to do so.

The aircraft bill of sale is a formality necessary to transfer title. An amount is on the form to show the parties agree there has been the ancient exchange of value. It doesn't have to represent the actual deal between the parties. It might mean $10 Million and if might mean a gift from parent to child, both of which might have to be disclosed to someone else, but not to the FAA when transferring title.

It's a choice. Some choose to enter the full dollar amount amount to the penny. Others choose this common phrase. Either way, it's meaningless beyond informed personal preference.
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If you present a falsified BOS to the state revenue department as proof of what you paid, pretty sure that's illegal. I know some states actually poll marinas and airports to get resident property holders, then they send out a notice that you owe taxes.
 
teejayevans said:
If you present a falsified BOS to the state revenue department as proof of what you paid, pretty sure that's illegal. I know some states actually poll marinas and airports to get resident property holders, then they send out a notice that you owe taxes.
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There is nothing false about it. The state will ask you for the actual price, if it is below what they believe is market value, they ask for additional proof on the sale price. Overall not a big deal. If you are selling/buying way below market value, it may make your life a little easier to actually list the value. But it is all legal.

Tim
 
It really doesn't do anything other than obscure the information. The taxman isn't going to buy a $1 bill of sale. They'll impute the a value to the aircraft if the bill of sale doesn't give a convincing sales price.
 
teejayevans said:
If you present a falsified BOS to the state revenue department as proof of what you paid, pretty sure that's illegal. I know some states actually poll marinas and airports to get resident property holders, then they send out a notice that you owe taxes.
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If someone presents a bill of sale to the government that says "$1 and other valuable consideration" and expects anyone to believe that was the purchase price, he's not only committing tax fraud, but he's pretty dumb. As Mark and others have explained, such a bill of sale really is the norm in all manner of transactions.

The important thing to note is that the bill of sale, like the recorded deed to your house, is merely the instrument that transfers ownership, it's not the contract. Somewhere else, there should be evidence of a contract that spells out the actual purchase price.
 
Lindberg said:
If someone presents a bill of sale to the government that says "$1 and other valuable consideration" and expects anyone to believe that was the purchase price, he's not only committing tax fraud, but he's pretty dumb. As Mark and others have explained, such a bill of sale really is the norm in all manner of transactions.

The important thing to note is that the bill of sale, like the recorded deed to your house, is merely the instrument that transfers ownership, it's not the contract. Somewhere else, there should be evidence of a contract that spells out the actual purchase price.
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Almost as dumb as doing business with a state that thinks it's entitled to your money after you make a private party sale.
 
tspear said:
Define private party.

Tim
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Two private citizens exchange in a transaction for a USED and already taxed item, how is the government entitled to their money? What did the government bring into the deal to bring value to the said aircraft/car/etc?

It's a scam
 
pigpenracing said:
$1.00 & OVC on everything. Everyone I know does this.
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Good luck with that.

In any state with a Revenue Dept they are going to decide what you paid for it and assess the appropriate sales/use tax and you have to prove otherwise.
 
midlifeflyer said:
The aircraft bill of sale is a formality necessary to transfer title. An amount is on the form to show the parties agree there has been the ancient exchange of value. It doesn't have to represent the actual deal between the parties. It might mean $10 Million and if might mean a gift from parent to child, both of which might have to be disclosed to someone else, but not to the FAA when transferring title.
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:idea:

@SixPapaCharlie , 10 bucks if you submit $10,000,000 on the bill of sale. Next guy will wonder WTF? :lol:
 
arkvet said:
Like stated above it's simply for privacy so no one in the future will know what you paid for it.

You'll still pay taxes on what you actually bought it for.
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Very common on used cars, and other things that have titles. It is not considered an attempt to avoid taxes, and tax is still collected.

When my dad gave me his car, we had no idea of its actual value. The bill of sale read $1 + OVC. It didn't matter that I'd paid nothing for the car, when licensing it I had to pay sales tax on its book value.
 
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Sundancer said:
Anecdote, perhaps fuzzy on exact details, but as I recall, two guys with $25K in cash were driving some distance to buy restaurant equipment from a place that was shutting down. Traffic stop, cash confiscated, and after a long fight, they got half back. Apparently happens all the time - basically legal robbery by LE, and a serious source of income for 'em. . .some pushback began, I think, some pendulum swing the other way now. . .
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Thieves need to pay for their crimes.
 
James331 said:
Two private citizens exchange in a transaction for a USED and already taxed item, how is the government entitled to their money? What did the government bring into the deal to bring value to the said aircraft/car/etc?

It's a scam
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It is a scam; contact your state legislators.
 
teejayevans said:
If you present a falsified BOS to the state revenue department as proof of what you paid, pretty sure that's illegal.
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Well, of course purposely lying to a government taxing authority to get out of paying taxes is illegal.

But that has exactly zero to do with the Bill of Sale that gets filed in the FAA Registry reciting "$1 and OVC." (BTW, I would be surprised to run into the 1 in a million tax man who has never seen that phrase and doesn't know exactly what it means).
 
In some states, they ignore the sale price on the contract, and charge you the tax on what THEY think the airplane should be valued. On the planes I have sold, I have always used the actual sale price, and on one instance the state Dept of Revenue called me, and accused me of understating the value. I told them to go pound sand.
 
James331 said:
Two private citizens exchange in a transaction for a USED and already taxed item, how is the government entitled to their money? What did the government bring into the deal to bring value to the said aircraft/car/etc?

It's a scam
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How does already taxed play into private party sale? In the majority of states, any sale transaction is taxed. It is called a "sales tax". Legally, there is no difference between Joe public citizen, Amazon, or the FBO. Each one is considered an "entity", and sale transactions between entities are taxed.

It really is a binary choice, move to a state that does not have a sales tax (or excludes planes) or contact the state legislature and advocate for change.

Tim
 
Yep, that happene
denverpilot said:
A friend joked that he wanted to be paid in cash when I bought his truck. I filled out all the anti-drug lord anti-terrorism stuff at the bank and then the teller proceeded to count out a lot of one hundred dollar bills on the counter in front of everyone in the bank, loudly.

I was pretty alert while walking to my truck with that envelope in my breast pocket of my jacket.

I locked the cash up in the safe and the next time it came out was taking it directly to him at his workplace. I made sure nobody else knew he was carrying that much cash, unlike the utterly retarded bank teller.
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That was for the camera. "look, nothing up my sleeve"
 
I've used $1 OVC on most my plane purchases. For a sale, I leave it to the buyer. I do report the sale to the FAA as required.

Oklahoma and Tennessee both will send you a letter saying you owe them money based simply on FAA transfer records. When I moved my J-3 project, which I inherited from my dad, from Missouri to Tennessee, TN tried assessing me an excise tax of 7%. When I was able to show it was 1) incomplete and not airworthy (no engine/prop) and 2) proved that it has been in the family since 1969, they waived it. On my Starduster Too, they sent me a letter stating I owed them taxes and that if I didn't provide a document showing purchase price (rather than my word), they would a price. I waited on them and paid the bill when it came.

My Swift, purchased in and registered in Oklahoma was taxed by OK at 3.25%. When I moved to Tennessee, TN picked up the change of address on FAA records and assessed an excise tax of 7%, minus the 3.25% I paid in Oklahoma...simply for moving.

My RV-4 took over 2 years before I got the letter from TN wanting their cut. While the BOS reflected $1-OVC, I had kept copies of check and memo info showing the price and what was purchased. They accepted that...and took their 7%. They waived fees/penalties for not reporting at time of sale, which most don't do on private sales.

While the state will get airplanes based on FAA registration transfers, including simple change of address between states, the DMV gets you when you buy car tags. My BOS for my CJ-7 didn't have an amount listed. The clerk simply asked me the amount and I told her the truth...and wrote a check for several hundred in taxes. :(

The taxman cometh regardless what is on the BOS. Government will spend thousands on manpower to collect $10.
 
SixPapaCharlie said:
I did a record request on a few different planes that I vetted.
Today one came back and it had changed hands maybe 6 times over the years.

Every single bill of sale says something lke
"for and in consideration of $ 1.00 the undersigned owner of the full legal and beneficial title of the aircraft described as follows"

Most are $1 or $1 and OVC
A couple are $1000 and one is $3000

So what is this about?
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I don't.
I fill in the correct amount.
 
Clark1961 said:
So you are a free range boobie guy?
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Nah, my boobies seem to prefer shelter and air conditioning. Have had the same two pairs under one roof for 22 years now. Not the oldest boobies in captivity, but we're getting there. LOL.
 
teejayevans said:
I know some states actually poll marinas and airports to get resident property holders, then they send out a notice that you owe taxes.
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This has been going on for a long time. Back in the 1960s my Dad bought a boat. He dragged his receipts etc into the assessors office of the town where he lived - about a two hour drive inland from the Marina where he was docking the boat. The assessor saw this as free money, and assessed the boat well below what the assessor at the shore would do. Win win for both parties.

Perfectly legal then. The boat could be declared at the owner's residence or at the Marina. Now? Dunno.

When the shore town came calling (and they did!) it was a simple matter to document "we gave at home".
 
tspear said:
How does already taxed play into private party sale? In the majority of states, any sale transaction is taxed. It is called a "sales tax". Legally, there is no difference between Joe public citizen, Amazon, or the FBO. Each one is considered an "entity", and sale transactions between entities are taxed.

It really is a binary choice, move to a state that does not have a sales tax (or excludes planes) or contact the state legislature and advocate for change.

Tim
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Because they can make a unlimited amount of money on something that has already been taxed.

As far as legal, lol, you should research how things become "legal"

 
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denverpilot said:
Nah, my boobies seem to prefer shelter and air conditioning. Have had the same two pairs under one roof for 22 years now. Not the oldest boobies in captivity, but we're getting there. LOL.
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Ok, this post has really confused me, what's your pronoun?
 
Unless Texas law has changed, they will charge sales tax on an individual buying an airplane within the state.

If a partnership (corporation or a couple of buddies) buys the airplane, they do not charge sales tax.

I have not looked at the regulations in a couple of years.

When the economy is good, they are too busy cashing checks to look at everything. When the economy is bad, they are looking hard for people to send tax notices to.
 
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