<p>I probably know the answer but I guess I want to validate it. My daughter, who got married this summer and therefore does not live at our house 
drives a car that we own. She has her own insurance on it. I am going to gift the car to her. So here is my question: the registration is paid for until April. Is there any liability for us to own the car until the registration is due? Would it be better to eat a few months and give her the car now and have her register it now? We live in Illinois.</p>
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<p>Yes.</p>
<p>But as long as she has ample insurance, youâll be fine. Her definition of ample will likely be less than yours. (You want enough insurance so your insurance coverage is greater than the value of your assets).</p>
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<p>Is it enough that gift taxes will be a problem?</p>
<p>Mmmmm, are insurance companies different on this issue?</p>
<p>I know that our car insurer will only insure cars that are registered in my name or my husbandâs name. I know cause I asked if they would continue to insure my âextraâ car that college student son uses if I had him register it in his name.
The clear anwer was NO. So, while he keeps a good driving record, we will continue to insure the car in our name. When he graduates in May, we will give him the car and he will register in his own name and buy his own insurance. YMMV</p>
<p>I bought car insurane on a car I didnât own. They didnât ask who owned it and I didnât tell.</p>
<p>The car insurance people have never asked who owns the car or any of our cars. As for the gift tax- because it is within the family, we will only have to pay $15 in taxes to the state and I doubt it will effect her federal income tax.</p>
<p>The gift tax is a federal tax that applies to family transfers. It only applies if the item is of significant value (over around $12000 or something). But if the car is a nice one, it will apply in your situation.</p>
<p>The gift tax affects the givers and not the recipients taxes.</p>
<p>We donât have to worry about that. It is an okay car but apparently not of significant value.</p>
<p>In our state, you donât âgiftâ a car to someone in your family. You simply transfer the title if itâs to a family member. No cash exchanges and there are no taxes owed.</p>
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<p>The IRS defines a gift as anytime you transfer anything to anybody else at less than fair market value.</p>
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<p>Its not so much the carâs value that should be of a concernâŠits your assets as a whole that need protecting.</p>
<p>If there is an accident with significant personal/property damage, YOU as the registered owner of the car can be sued for a lot of money, regardless of the insurance coverage on the car.</p>
<p>At least in my state where registration costs about $70/year, it wouldnât matter to me to eat a few months of registration fee. If I was going to gift a car, I gift it and get it out of my name.</p>
<p>When we trades our old vehicle in for a new one, the portion of the registration fee that was based on the value of the car was prorated. The flat fees werenât. I guess it depends on the local laws.</p>
<p>Babyontheway, thanks for a good laugh - you think we are all so rich we gift Lexuses to our kiddos ;)</p>
<p>It depends somewhat on where you live-different states have different rules.</p>
<p>I like things nice and cleanâgift the car now and eat the registration fees.</p>