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Another Tax Credit Question but Different

Discussion in 'Model 3' started by MSB1102, Jul 29, 2017.

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  1. MSB1102

    MSB1102 New Member

    Joined:
    Jul 29, 2017
    Messages:
    1
    Location:
    SoCal
    Hi Guys,

    New to this forum but not to the EV world. Have owned a 2014 Rav4 EV (Tesla Battery/Guts) and 2012 Leaf. Always leased so never had to worry about filing for credit. Been on the fence between MS and M3 but given the range, I'm going with the M3 w/all options and am early reservation holder so I'm not asking if I'll actually get one in time to qualify. My question assumes I will and want the fully loaded model.

    Now that I know I can't lease (at least at the beginning) I've started to explore my options. Quit my job after my son was born in February and went back to school full time so I only have 12K wages. I sold some stock and made 50K in long term capital gains thus far. Reinvested and have another 20K thus far in unrealized gains. (in 25 days, thanks FB!!!)

    I have 3 small children and my wife is also a full time student with no income. I live in SoCal. I want to be able to take advantage of the $7500 and get the full $4500 from the state rebates w/under 300% rule. I used the taxcaster app but it doesnt allow for entering EV rebate.

    I would like to go married filing separately. Buy the car under my wifes name and have her claim the 50K in capital gains. Then have her claim the $7500 credit. I would claim the 14k in wages (obviously), and the 3 kids. That would give me 9k in refunds (mainly for the kids) and eliminate her liability on the 50k down to zero while still leaving our household income below the 300% threshold which should qualify us for the full $4500 (and maybe even financial aid for school if we're lucky). I will probably make more capital gains all the way down to the 300% limit at the end of the year.

    I realize this isnt a tax advice board, but i know quite a few of you havce experience with the ev rebate and given we're talking about expensive vehicles I assume capital gains. Any input or advice on anything I may have overlooked would be appreciated.
     
  2. Keith S

    Keith S New Member

    Joined:
    Jul 29, 2017
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    Location:
    Freeport ny
     
  3. Keith S

    Keith S New Member

    Joined:
    Jul 29, 2017
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    Location:
    Freeport ny
    Dont know if any of this info applys, but in NY, $7500 rebate only applies if you make over 100k i believe.....less if you make less. Also, after tesla makes there 200k worth of cars, the next quarter(100k more cars) the rebate is cut to $5k max. Then after another quarter (100k more) cars the following year, cut to $2.5k. Then rebate go to zero...keith....
     
  4. cpa

    cpa Active Member

    Joined:
    May 17, 2014
    Messages:
    1,464
    Location:
    Central Valley
    California is a community property state. The rules for MFS are quite clear on how to report income and allocate deductions and tax credits between spouses. I suggest that you spend some time researching the land mines out there for filing separately. Or, consult with a competent tax professional to explain the rules to you and prepare proforma 2017 tax returns for you and your wife. You will be disappointed. Seriously.

    Furthermore, if your income is as low as you state, most if not all of your capital gains will be taxed at zero percent. Throw in three additional dependents (your children), and I would suspect that your 2017 federal income tax liability will be a nice, round zero.

    You still have five months remaining this year to gin up some additional ordinary, not capital gain, income. That would be your best shot to be able to utilize the full $7,500.
     
  5. caltechkid

    caltechkid Member

    Joined:
    Dec 17, 2016
    Messages:
    232
    Location:
    Taxifornia
    Hmmm...financial aid for school....while day trading FB....gotta love CA.
     

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