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another tax credit question... sorry guys/gals....

Discussion in 'Model S: Ordering, Production, Delivery' started by Bobbyducati, Nov 6, 2014.

  1. Bobbyducati

    Bobbyducati Member

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    Ive scoured the archives/google for an answer but cant quite find the same situation anywhere...

    So i dont have the means to take full advantage of the 7500$ tax credit due to too many deductions. I was going to let the tax credit be used by the co-signer (father), so i told him person to ask his tax guy if thats going to be an issue to claim the credit. His tax guy said that only a spouse could "share a tax credit", and that "all others must be assigned to one owner". Ok....

    So i dont plan on "sharing" or dividing the tax credit up, but allowing the co-signer to take it entirely.
    And for the second part....Im really thrown off, wouldnt that invalidate all credits that were part of a financing?

    Has anybody given a credit up to someone else, either a co-signer or someone entirely not on the title (i dont think this is possible but asking just in case)? Maybe i can make him the primary owner, and ill become the co-signer?

    Any help would be greatly appreciated.
    Thanks
     
  2. andrewket

    andrewket 2014 S P85DL, 2016 X P90DL (soon 100)

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    Let your father buy the car and take the credit. Then he sells you the car. Most states allow a tax free transaction between immediate family.
     
  3. Lloyd

    Lloyd Active Member

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    In order for your father to take the tax credit, he has to be on the title. You can have two people on title, and one can take the tax credit, but not both to the full amount.
     
  4. Bobbyducati

    Bobbyducati Member

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    this is what i was trying to do, but the tax-guy was saying otherwise. have you done this yourself? Im just trying to find an anecdote to verify I can do this.
     
  5. Lloyd

    Lloyd Active Member

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    As additional information, the person or persons claiming the credit MUST be on the title as sold from the factory. You can't add someone later.
     
  6. Bobbyducati

    Bobbyducati Member

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    This will be my last resort i think. I just need to make sure hes cool with it.
     
  7. Lloyd

    Lloyd Active Member

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    Yes, I have done this.
     
  8. Bobbyducati

    Bobbyducati Member

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    excellent, i just need to make sure his name is on the title along side mine. Is this handled with the bank versus when tesla, sorry for all the questions, last thing i want to do is screw this up because i messed up the timing or something. doing this in a state that doesnt sell teslas isnt making this any easier...
     
  9. Lloyd

    Lloyd Active Member

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    If your car is financed, you will have to change the paperwork BOTH with the bank and Tesla.
     
  10. Bobbyducati

    Bobbyducati Member

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    thanks. will make sure i discuss this with both parties.
     
  11. chang

    chang Member

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    Does this increase the chances of being audited by the IRS by any chance?
     
  12. Bobbyducati

    Bobbyducati Member

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    not sure how its any different than a lessor claiming the tax credit, plus the co signer will also be using the car periodically, although it'll be registered and insured in my name. i dont think it would set off any red flags.
     
  13. Lloyd

    Lloyd Active Member

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    They will look to make sure that the person claiming the credit is on the title, then if two on title they will check to make sure that the 2nd person did not claim it also.
     
  14. breser

    breser AutoPilot Nostradamus

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    They don't have the title or anything else unless they audit you. They do have the VIN (it goes on Form 8936). So I'd suspect the red flags on this only get sent up if two people request the credit on the same VIN.

    Of course if you get audited they're going to look at the title and if the person who asked for the credit isn't on it then it's going to be an issue.
     
  15. Bobbyducati

    Bobbyducati Member

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    this is my thought as well, im not concerned at all.
     
  16. swaltner

    swaltner Member

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    For the OP, do you have money in a traditional IRA? If you do, an easy way to inflate your income for this year would be to covert some money from a traditional IRA to a Roth IRA. An IRA Conversion would increase your income and thus your tax liability for this year so you could take advantage of the tax credit. Might be something to consider instead of messing around with putting extra names on the title.

    Having said that, back when the Roadster first came out and Colorado hadn't quite adjusted their tax rules, I REALLY WANTED to have a friend in Colorado buy a Roadster, take advantage of the approximately $45k state tax credit, and then sell me the car for a heavily discounted price. :) It just seemed like a situation that would potentially cause HUGE problems between friends though, so never even discussed it with anyone.
     
  17. chang

    chang Member

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    Also random question-- Would it be possible to transfer the credit to the following year instead?
     
  18. breser

    breser AutoPilot Nostradamus

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    No, you can't carry it forward.

    The credit is defined in 26 U.S. Code § 30D - New qualified plug-in electric drive motor vehicles | LII / Legal Information Institute

    Which says that the credit is allowed under Subpart A which is this 26 U.S. Code Part IV, Subpart A - Nonrefundable Personal Credits | LII / Legal Information Institute

    More specifically Section 26 limits the credit to the tax liability for the current year 26 U.S. Code § 26 - Limitation based on tax liability; definition of tax liability | LII / Legal Information Institute

    Note that non-refundable in this context means that you can't get more of a credit out of the IRS than your tax liability, not that you can't receive a refund on the basis of the tax credit if you've already paid in more taxes than you owe after applying the credit.
     
  19. Bobbyducati

    Bobbyducati Member

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    i looked in to this and this would not work for me.
     
  20. CHGolferJim

    CHGolferJim Member

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    A related point........the 2014Q3 information suggests the tax credit will lapse sometime in 2016, before Model3 availability. [+/- 60k through 2014, 60k in 2015, and 50%+ growth in 2016.]. If this is relevant to you, order by early 2016.
     

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