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Definition of "Placed in Service" WRT fed tax credit?

Discussion in 'Off Topic' started by bro1999, Dec 28, 2016.

  1. bro1999

    bro1999 Member

    Joined:
    Apr 26, 2016
    Messages:
    849
    Location:
    Maryland
    I've been involved in an interesting discussion on another forum about the situation of filling out paperwork and purchasing a vehicle BEFORE the car is delivered to the customer. In this case, paperwork is trying to be filled out before the year is over so that the purchaser can claim the $7,500 tax credit for 2016.

    My question is, what is the definition of "placed in service"? The language of the tax credit says the car needs to be purchased and titled in the year the credit is claimed in addition to being "placed in service" that year.

    If someone were to process all the purchase paperwork for an EV on 31 Dec of this year (and add the car to their insurance policy...all that stuff before the year is out), but not take delivery until say mid-January, would that vehicle be eligible to claim the EV fed tax credit in 2016?? Would claiming it in 2016 potentially open up that person to having the IRS deny the credit?

    I was reading this (Electric Vehicle Not Placed In Service by Year End, Credit Denied), which made me start to wonder about the validity of claiming the credit in the current year in the above situation.
     
  2. aesculus

    aesculus Still Trying to Figure this All Out

    Joined:
    May 31, 2015
    Messages:
    2,470
    Location:
    Northern California
    Not a tax expert but NIMHO. You are missing the all important
    Which happens when you take delivery, and not before.:(
     

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