Brand New Model 3 For Sale

[Zorg]

We read the same thing, but it comes down to interpretation.

To me it forbids buying a car where you act as a reseller (like a reseller of new Apple computers), and claiming the tax credit. That's to prevent more than one person getting the tax credit on the same car.

What this guy did was he bought the car NEW, and he's selling it as Used.

Only one person gets the tax credit, and that's all the government cares about.

As an aside when are you getting your Tesla? I think you might be the only one that's exceed 4000 post without having the car.

You may be right but I would not want to make that argument to a tax auditor.

 

[S4WRXTTCS]

You may be right but I would not want to make that argument to a tax auditor.

All the tax auditor is going to care about is if your name was on the title.

That he didn't try to act as a dealer, and he didn't avoid paying sales tax for it. His name will always be associated with the car as the initial owner as his name is on the initial title.

For those of us who are waiting in line what he's doing is annoying. But, the government doesn't care if he bugs us.

Now of course the government will care about the profit. They will most definitely come after him for that. Since he's trying to make more than the tax credit. He might want to look into his tax situation if he indeed sells it for around $70K.

 

[McRat]

Here it is from their website, "The vehicles must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must commence with the taxpayer and the vehicle must be used predominantly in the United States. "

So, above poster is correct, but yes, there is also no specific timeline stated, so there is no way to prove whether you bought it for resale or not. You can buy a car, drive it for one day, not like it, then sell.

Here's how an audit works. Some are done at random, most are done based on a trigger. They make decisions during your audit, some of which are arbitrary. If you do not declare the profit of resale, you have falsified your income. If you do declare it as income, it would be their choice to say whether or not you intentionally bought the car for resale.

My guess is if you were caught, it would be based on a bank deposit trigger of more than $60k after a withdrawal of a lessor amount with no other documentation for the transaction, or declaration of the sales tax exemption when you don't own the car, or the buyer files for the tax credit.

You can fight an audits results, possibly all the way to the SCOTUS like the 'tomato is a vegetable' decision. But I doubt anybody will take the case pro bono.

The reality is that you probably won't get caught unless the new owner files for the tax credit. So it depends on how robustly your CPA does your accounting. We were audited once. High anxiety for 3 days. That's all the time between the IRS letter and the appointment we received. Couldn't sleep without nightmares. Not sure what triggered it. I didn't have money for a legal battle. My neighbor was having his business audited for the last year, and he was in a death struggle. They win, he closes up. They wanted over $40k from him. ($40k was a lot back then)

In the end, the trigger was excessive mileage credit for education required for business. He said he would get back with us with a decision. Another 7? days of high anxiety then we received a letter. It had a check for $253 in it. We overpaid. The letter said the mileage was acceptable.

So it boils down to whether you're an adrenaline junkie. Racing actually calms me down (unless the vehicle is on fire, a pet peeve), but audits do not. My quality of life is more important than a few thousand dollars.