Transferring a registration in a trade? | GTAMotorcycle.com

Transferring a registration in a trade?

Motorcycle Mike

Motorcycle Mike

Well-known member
I'm somewhat considering putting one or both of my bikes up for sale in the spring and considering accepting a trade for one or the other of them for a DR650.

I searched the MTO website and could not find anything regarding a vehicle trade. They have the bits for buying and selling, but not for a straight up swap.

What is the legit way to register a traded vehicle? Are both parties supposed to declare the value of their trade for tax purposes, or is the amount of money that actually traded hands the taxable amount?

I've only ever traded a car for a new one, and in that case the value of the trade in was deducted from the new car purchase price so I paid less tax.

(I know most will just declare a very low buying price because there is no red book for bikes, however I was curious about the actual expected procedure that the MTO expects).
 
Only in a dealer trade in is the value of the traded vehicle deducted from the purchase price for the purpose of taxes.

For a private trade, for the purposes of the actual transaction, the "trade" portion is irrelevant - it'll be handled as any other sale. You're selling your bike to him, he's selling his bike to you - you look after the financials.

Now, that said, as you mention, there is no book value for bikes so the option to put a ridiculously low sale amount is there in an effort to benefit the trade situation. Your call on that - they can and sometimes do followup on declarations that are obviously far off the mark, and since there's no allowance for the trade scenario where in reality not a lot of money may have actually changed hands, the government might give the whole thing the fuzzy eyeball. How they might pursue that (demand an appraisal? Who knows...) and demand the value after the fact? Doubtfull, but possible.

I know from personal experience that they do sometimes send out letters to private sellers asking them to verify the actual sale amount to ensure it's what the buyer declared at the time of transfer. Again, assuming you're both on the same page that's not likely an issue, but if you happen to get someone looking at your file that knows darned well that 2014 Harley (for example) has a value way above the (again, for example) $1000 you declared, well, again...your call on how you figure they might handle that.
 
I adopted a bike this year. The bill of sale said $0. I paid no tax, just the $14 transfer fee, and I never got a letter confirming the price.

If considering a trade I would just say you're each giving away your bikes to each other at zero cost. I don't think that's a lie.


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^^ That's certainly a good option, so long as the government sees it the same way.
 
PrivatePilot said:
^^ That's certainly a good option, so long as the government sees it the same way.
Click to expand...

I don't think it matters how "the government sees it". Two separate transactions, each with one person giving their bike away for zero dollars. Based on how the MTO collects taxes on used motorcycles there would be no tax paid and it's 100% within the law.
 
caboose56 said:
I don't think it matters how "the government sees it". Two separate transactions, each with one person giving their bike away for zero dollars. Based on how the MTO collects taxes on used motorcycles there would be no tax paid and it's 100% within the law.
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Try that with 2 cars that do have book values and see how that works out for you.

Thats is my point. There's a good chance that they might not question it at all, but they're always exists the chance that some government bean counter somewhere takes offense (perhaps he's a rider, or perhaps he knows how to use Google and get rough valuations) and questions it after-the-fact at which point the taxes plus a penalty can be charged.

So, that was my point when I said to the OP to "Your call". The only reason this might work with motorcycles is because there's no book values, but that doesn't mean it would work if there was – again, that's my point

There are exceptions for transfers between blood relatives, however that's not the case here and is neither applicable or possible.
 
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PrivatePilot said:
Try that with 2 cars that do have book values and see how that works out for you.

Thats is my point. There's a good chance that they might not question it at all, but they're always exists the chance that some government bean counter somewhere takes offense (perhaps he's a rider, or perhaps he knows how to use Google and get rough valuations) and questions it after-the-fact at which point the taxes plus a penalty can be charged.

So, that was my point when I said to the OP to "Your call". The only reason this might work with motorcycles is because there's no book values, but that doesn't mean it would work if there was – again, that's my point

There are exceptions for transfers between blood relatives, however that's not the case here and is neither applicable or possible.
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Well we aren't talking about cars, now are we??

Your point is not germane to this discussion.


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No we most certainly are not talking about cars which is why I mentioned several times at the whole idea might be viable, however I rightfully advised the OP as well as anybody else that might read this thread down the road that from a purely legal perspective it's a grey area at best.

If you're OK with diving into gray areas when it comes to government and taxes, then by all means go for it, but it's important to remember that when it comes to government & taxes they have a way of catching up with you if they want to, so whomever's considering it can do the risk assessment accordingly themselves.

Making the exchange with low value versus zero value receipts would probably be the method most people would go, and yes, it's rarely problematic unless you write a value so ridiculously low that even the people at the MTO give it the fuzzy eyeball.
 
Not sure how it's a grey area.

Both bikes are being given away for $0. According to the rules set in place by the MTO there would be no tax paid.

Unless it's illegal to give your bike away?


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Again, try it with a car. Write a $0 receipt for a trade. Guy one trades a $50,000 car for a different colored $50,000 car (theoretical situation but you get the drift), they're both happy with the colours they originally wanted and no money changed hands. Go to ministry to transfer ownerships- you won't get away with paying $0 taxes - You pay the tax on the value listed on the UVIP.

Thats my point.

The OP asked for the presumably legal/actual process and details, I provided that. If the OP wants to step into the grey area that's admittedly really big with this sort of transaction because of a lack of a book value, then all the power to him, but that doesn't change the facts I've stated.
 
Thanks Caboose, I think if I find someone who wants to trade that is what I will do.

I will make out a bill of sale saying I am giving my motorcycle to Joe Blow and have him do the same.
 
PrivatePilot said:
Again, try it with a car. Write a $0 receipt for a trade. Guy one trades a $50,000 car for a different colored $50,000 car (theoretical situation but you get the drift), they're both happy with the colours they originally wanted and no money changed hands. Go to ministry to transfer ownerships- you won't get away with paying $0 taxes - You pay the tax on the value listed on the UVIP.

Thats my point.

The OP asked for the presumably legal/actual process and details, I provided that. If the OP wants to step into the grey area that's admittedly really big with this sort of transaction because of a lack of a book value, then all the power to him, but that doesn't change the facts I've stated.
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Were not talking about cars! Any transaction involving a car is not germane to this discussion.

Just stop!


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Motorcycle Mike said:
Thanks Caboose, I think if I find someone who wants to trade that is what I will do.

I will make out a bill of sale saying I am giving my motorcycle to Joe Blow and have him do the same.
Click to expand...

You're welcome. Good luck in your search.


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Did the last 3 bikes this way.

Told them i traded bikes and set value at a dollar to legitimize the deal. Paid my 13 cents and on my merry way.
 
caboose56 said:
Were not talking about cars! Any transaction involving a car is not germane to this discussion.
Click to expand...

Change "Car" to "vehicle", and my point, which seems lost on you, might make more sense.

We're talking a vehicle transfer.

Mike, I think you're wise enough to see the point I'm trying to make and draw your own plans accordingly. I don't blame you at all going the route you've chosen, many would do the same, hell...probably including me. I just thought it value added to provide the actual full process, even if some want to try to be obtuse about the facts. Enjoy the new bike, Cheers.
 
Change cars to unicorns and your point still has nothing to do with tax collection on motorcycle transfers.

Just stop.


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caboose56 said:
Change cars to unicorns and your point still has nothing to do with tax collection on motorcycle transfers.

Just stop.


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he has to he trolling. There's just no way
 
Believe it or not, I'm going to Service Ontario tomorrow to get my stickers for the car and motorcycle.
Shall I ask and get it from the horse' mouth?
 
statsman said:
Believe it or not, I'm going to Service Ontario tomorrow to get my stickers for the car and motorcycle.
Shall I ask and get it from the horse' mouth?
Click to expand...

Ha. Sure.

But, for what it's worth, I seem to get different answers from different offices and different staff.


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caboose56 said:
Change cars to unicorns and your point still has nothing to do with tax collection on motorcycle transfers.

Just stop.


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Doesn't work with unicorns; there's the imaginary animal tax. Say toilets. Yeah, toilets. Let's go with that.

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