Mount Orab, OH asked in Uncategorized for Ohio

Q: Can the IRS determine the value of a private party car and say you bought it undervalue and force you to pay more

If I buy a car valued 3k for 1k can the IRS still make me pay the difference? I'm interested in purchasing and reselling vehicles but don't want to get audited for paying what the seller wanted? Does the value matter if your paying what the asking price was?

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1 Lawyer Answer

A: If they say you bought it undervalue, that would reduce your profit which is taxable income. So it would not make any sense for the IRS

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