Gifting a Car in Indiana: Taxes, Fees & Rules (2026)
True gifts with no payment are exempt for anyone (Form ST-108E). Adding or removing a spouse, child, grandparent, parent, or sibling on a title is also exempt — but family sales are taxed. The title fee of $15 still applies. Verified against official Indiana 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 Indiana
Even a fully exempt gift pays the standard title transfer fee of $15. The recipient also takes on normal registration costs going forward. Apply for title within 45 days; the late penalty is $30.
Frequently asked questions
Do you pay taxes on a gifted car in Indiana?
True gifts with no payment are exempt for anyone (Form ST-108E). Adding or removing a spouse, child, grandparent, parent, or sibling on a title is also exempt — but family sales are taxed.
Is it better to gift a car or sell it for $1 in Indiana?
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. True gifts with no payment are exempt for anyone (Form ST-108E). Adding or removing a spouse, child, grandparent, parent, or sibling on a title is also exempt — but family sales are taxed. Follow the gift procedure, not the $1 shortcut.
What does the title transfer cost on a gifted car in Indiana?
The title fee is $15 — that's due on gifts too, even when the tax is exempt. Apply for title within 45 days; the late penalty is $30.
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 (in.gov, in.gov) — last reviewed 2026-07-17. Estimates are informational only.