I read somewhere that if a person puts a downpayment on a vehicle equal to or greater than $10,000, the dealership has to report this to the IRS. Is that true? And if so, why and how does this affect the purchaser?

Sounds stupid to me, but I just want to make sure.

Thanks in advance.

 

It's my understanding that it only applies to cold, hard CASH. Since the IRS could track checks through the banks, it doesn't apply. The IRS wants to make sure we aren't laundering money or working with drug dealers. And don't think you can get around it by breaking it up into smaller amounts; if the TOTAL amount of cash a dealer receives from a customer is $10,000 or more ($3,000 initial deposit + $8,000 on delivery, for example), then it gets reported. Well, it gets reported by dealers that know what they're doing AND DON'T WANT TO GO TO JAIL.

 

its the same with any cash depost anywhere (ie: your bank, credit union, etc) There is actually a form and I don't remember what the number is, but anytime somebody comes into the credit union with that large of a cash deposit, or comes in with a deposit of that size over a day or two, we are required by law to send in information regarding the transaction. some of the info they ask for is your detail id info (ie: driver's license #, Social security number, etc) they also ask about your employment, what the money is from, etc. We don't have to go into all those questions with the customer, but we do have to put as much detailed info as we know. Like Mark said, its a preventive thing for them, that way they can be aware of big cash transactions and any possible laudering, counterfiet, drug deals, or spending of stolen money.

the only way that I could see it affecting you is if you didn't claim it and they somehow trace it back to you as untaxed income or you've been participating in some illegal activity....if neither of those is a problem, then you got nothing to worry about.

 

Thanks for the replies. I was merely curious because I plan on putting down $12,000 on my truck. What I read regarding this didn't specify it only pertaining to cash, that's why I thought it was kind of bogus, but now that I know, it makes sense. I'll be using a check.