I know i should call....but im having a lazy moment.
It depends on the state. Some states go by the blue book value no matter what you pay for the car. Some accept a reasonable price, some will make you sign a statement declaring you paid less than the car's blue book value (which is fair). A 2009 Cadillac may be worth $40,000.00 but if it's wrecked it may be worth only $4,000.00
She is doing this to cut down on the taxes she has to pay, I just gave my brother n law a car and I think the lost I could put it to was $200 on the bill of sell. If I remember correctly I think the TT&L was close to 60 to 70 here in Texas.