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Motor Vehicle Tax Guide
Inherited Motor Vehicles
Taxable as Gifts
Each of the following transactions is subject to the $10 gift tax:
- Receipt of an unencumbered inherited motor vehicle as specified by a deceased person’s will or through Texas Department of Motor Vehicles (TxDMV) Form VTR-262, Affidavit of Heirship for a Motor Vehicle (PDF). If there is an executor/executrix, the executor/executrix should sign Form 14-317, Affidavit of Motor Vehicle Gift Transfer (PDF), as the donor.
- The transfer of a motor vehicle from the decedent spouse’s estate to the surviving spouse (the death of a spouse terminates the community estate).
- The transfer of a motor vehicle to a surviving owner(s) of a motor vehicle, owned jointly by two or more parties, subject to a binding Form VTR-122, Rights of Survivorship Ownership Agreement for a Motor Vehicle (PDF), filed with the TxDMV.
- The transfer of an unencumbered motor vehicle to a beneficiary of a testamentary trust or a revocable trust subject to the provisions of the trust instrument. The trustee signs Form 14-317 (PDF) as the donor.
Liens or Other Consideration on Inherited Vehicles
If the heir assumes a debt or gives other consideration to the estate of the deceased person to whom the inherited motor vehicle belonged, motor vehicle tax is due and standard presumptive value (SPV) procedures may apply.
Note: The estate may owe motor vehicle tax on any motor vehicle that has not been previously titled and registered and on which Texas tax has not been previously paid.
Transfers by Heirs
When a motor vehicle is transferred by the heir(s) of a deceased person to another person, two taxable transactions have taken place. First, the heir(s) owes tax (either motor vehicle use tax or gift tax) on acquiring the vehicle from the estate. Second, the person receiving the vehicle from the heir(s) also owes motor vehicle tax. The second transaction is subject to motor vehicle use tax, unless the person receiving the vehicle is a qualifying recipient and the $10 gift tax applies.
96-254
(09/2021)