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In Alabama, a bill of sale is not always required by the Department of Revenue (FOR) for vehicles. It is, however, imperative when you are selling a vehicle and there is no title available. All bills of sale must be notarized or have two witnesses to the requisite signatures.
The bill of sale is required to prove the validity of purchase, ensure that it is genuine, and that the price paid is the same as the buyer claims. The five states that do require you to get a bill of sale notarized are Louisiana, Maryland, Nebraska, New Hampshire, and West Virginia.
Suggested clip Transfer Title Alabama - Seller Instructions — YouTubeYouTubeStart of suggested clipEnd of suggested clip Transfer Title Alabama - Seller Instructions — YouTube
Can I Sell a Car in Alabama Without a Title? The Alabama DMV requires a title to sell a vehicle that was manufactured later than 1975. If your title is lost, duplicate titles can be obtained from the Alabama DMV.
Proof of Alabama auto insurance. Driver's license of the new owner. Proof of residency. Payment for fees and applicable taxes.
Typically, the seller drafts the bill. The contents of a formal bill of sale differ from state to state. Some states require a bill of sale for a car to be notarized; a few require that it include an odometer reading. Other states do not require it altogether.
Notarized Bill of Sale Form. The Notarized Bill of Sale Form is a document that allows the transfer of any type of personal property (vehicle, boat, etc.) that is witnessed by a notary public. This designation is provided by every State and when a Notary signs a document, it becomes legally witnessed.
The seller's name and address. The buyer's name and address. A description of the item being sold, including serial numbers, identification numbers, make, model, size, color, design, any distinguishing marks, features or faults [source: Cooper].
For the buyer, the bill of sale is a record of the transaction. While there are no universal formats or rules for what a bill of sale should look like, the document should include the names of the seller and buyer, a description of the item being sold, and the date of the sale.
Information in a bill of sale for a motor vehicle includes a description of the vehicle, the VIN, and the odometer. It will also include the price as well as the names of the buyer and the seller. It should also be signed and dated by both. A bill of sale for a general item doesn't need to be notarized.
Rules for Gifts Less than half the states require a bill of sale form in a vehicular transaction, according to CarsDirect.com. The bill of sale confirms a title transfer and serves as evidence of a contract. If a state requires a bill of sale, it must be completed even if the vehicle is a gift.
Gifting a vehicle means no sales tax. But the person receiving the gifted vehicle to may have to pay a federal gift tax. As of 2019, a gift tax payment is required if the fair market value of the vehicle is more than $15,000 for a single individual or $30,000 for a married couple.
Suggested clip What do you do if you lost your bill of sale? | AFX — YouTubeYouTubeStart of suggested clipEnd of suggested clip What do you do if you lost your bill of sale? | AFX — YouTube
In general, gifts between family members are freely allowed, and there would be no sales tax at the time of the transfer. However, each state's laws are different, and you should check with your own state. Some states may require proof of a family relationship for the gift to be tax-free. Verify insurance for recipient.
You might wonder about the value of gifting a car vs selling for $1. The theory is that a $1-dollar sale will have taxes calculated on that purchase price, not the car's value. But the DMV isn't going to be fleeced that easily the DMV gift car process is the better way.
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