Tax Bill from Province

[Jungle Jim]

I had a friend tell me he got a request from the province(Ont) to pay the PST on the C150 he bought 2 1/2 years ago. ( this is a private registered plane sold to a private pilot)I was wondering what everyone else does with these requests. I have talked to some guys and they say that the requests stop after a while and they never hear about them again. Others say they just pay up. Maybe this is why planes are sold for $1.00?


Jim

[grimey]

Maybe this is why planes are sold for $1.00?

Wouldn't the tax be based off of the book value?

[gr8gazu]

Maybe this is why planes are sold for $1.00?

Wouldn't the tax be based off of the book value?

No. The purchase price, but the purchase price must be warranted.

This is why so many corporate aircraft are registered to management companies. A commercial asset is not taxed provincially. It is also why aircraft are flown to a tax free state (Oregon, New Hampshire, Delaware) to transfer title.

Speak to a tax attorney but I am quite sure the taxes are due..

[Icebound]

I had a friend tell me he got a request from the province(Ont) to pay the PST on the C150 he bought 2 1/2 years ago. ( this is a private registered plane sold to a private pilot)I was wondering what everyone else does with these requests. I have talked to some guys and they say that the requests stop after a while and they never hear about them again. Others say they just pay up. Maybe this is why planes are sold for $1.00?


Jim

Well for sure, if he ignores it, he will get a "SECOND REQUEST", at least. I don't know what happens after that because I paid up.

This was on a $12,000 boat or something like that, but was saving the Grand in taxes worth the lawyers fees it would have cost me, should they decide to audit???

Granted, on a 100,000 plane, saving 7 grand may be attractive, but it only means the penalty gets bigger, if audited. Two years after he pays it, he won't even notice.

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If a plane is sold for a dollar, and its real value is, say 20,000, does that mean that the recipient of the plane is on the hook for income taxes on 19,999.00? And if he sells it 5 years later for, say, 10,000, does he owe capital gains taxes on half of 9,999.00?????







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[mikegtzg]

I'm not sure about Ontario. In Manitoba they will hound you until you pay. That is why there are a disproportionate amount of aircraft registered in Alberta.

[mcrit]

I got my one request a year after I bought the plane. That was 3 years ago and I've not heard a thing since.

[Stinky]

You will get a total of three requests, throw them all in the garbage. It never came back to haunt me and it was 6 years ago. I was given this wise financial advice from numerous airplane owners.

[Justwannafly]

Granted, on a 100,000 plane, saving 7 grand may be attractive,

That's one expensive C150 lol

[floatingbeaver]

As stinky stated throw the notices in garbage. You will get up to 3 and that is it. In Ontario and I presume other provinces airplanes and water vessels are a federal regulated item the province can request you pay and Im sure alot of people do because they don't know enough not too. So save yourself the $ and pitch them.

[ei ei owe]

I've done the same kinda thing before with car sales (declaring a low purchase price to save taxes). The only thing I was warned of was if the car was written off or needed extensive work after an accident, the insurance company might only give you what you paid for it unless you can prove you'd done a whole pile of work to make it worth more. Could get screwed in the end. Would that apply to planes and the hull value?