Gifting a Car in Illinois: Taxes, Fees & Rules (2026)
Transfers from a spouse, parent, sibling, or child pay a flat $15 tax instead of the table (step-relations, in-laws, and grandparents don't qualify). An estate gift to a surviving spouse is $0. The title fee of $165 still applies. Verified against official Illinois sources on 2026-07-17.
Gift vs. selling for $1: don't use the $1 trick
The old advice to "sell it for a dollar" usually backfires. A $1 sale is still a sale — in states that tax the higher of price or book value, that means tax on the full book value; in others it simply voids the gift exemption you were entitled to use. The documented gift route (affidavits, the right box on the title) is what actually produces $0 tax where an exemption exists.
What you'll still pay in Illinois
Even a fully exempt gift pays the standard title transfer fee of $165. The recipient also takes on normal registration costs going forward. Title application within 20 days (Secretary of State); the RUT-50 and tax are due within 30 days of purchase, with Department of Revenue penalties and interest after that.
Good to know
- Cook County and some home-rule areas add a local private-party vehicle tax on top (Form RUT-6).
Frequently asked questions
Do you pay taxes on a gifted car in Illinois?
Transfers from a spouse, parent, sibling, or child pay a flat $15 tax instead of the table (step-relations, in-laws, and grandparents don't qualify). An estate gift to a surviving spouse is $0.
Is it better to gift a car or sell it for $1 in Illinois?
Gift it — properly. A $1 "sale" is still a sale in most states and can trigger tax on book value or invite a review, while a documented gift uses the actual exemption. Transfers from a spouse, parent, sibling, or child pay a flat $15 tax instead of the table (step-relations, in-laws, and grandparents don't qualify). An estate gift to a surviving spouse is $0. Follow the gift procedure, not the $1 shortcut.
What does the title transfer cost on a gifted car in Illinois?
The title fee is $165 — that's due on gifts too, even when the tax is exempt. Title application within 20 days (Secretary of State); the RUT-50 and tax are due within 30 days of purchase, with Department of Revenue penalties and interest after that.
Does the IRS tax a gifted car?
Almost never for normal vehicles — car values fall under the IRS annual gift-tax exclusion for most givers, so no federal gift tax or return is required. The state-level rules above are what actually matter.
Verified against official sources (tax.illinois.gov, ilsos.gov) — last reviewed 2026-07-17. Estimates are informational only.