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Federal Tax Credit HELP!

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Hey everyone,

I have a question, given in a particular circumstance, and hopefully you guys can give me some insight or your opinions.

I’m going to place an order for a model 3, under my account because I’m going to be driving it 99% of the time. I’m gonna put down $22.5K and the rest is going to be loaned. As you guys may have heard, there’s the regular secure auto loan, and then there’s the unsecured auto loan. I’ve read into both and the unsecured auto loan seems like the better option just to have fewer complications. In either case, my credit is not good enough to get approved for a loan with a very nice APR, so my uncle has agreed to stand for the loan for me.

Given that I’ve listed out the “conditions” I want to know how the federal tax credit will work given that it’s very important to the purchasing of this vehicle. The concerns I have deal with how my uncle can receive the full tax credit in these scenarios:

1) My uncle gets approved for the UNsecured loan, receives the money in his account and writes a check to Tesla for the whole price of the car during delivery day. Should we then have the car registered/titled under his name or mine?

OR

2) My uncle gets approved for the regular secured loan in which the lender’s name will be on the title, and the car won’t be “owned” until the loan is paid off. Should we have the car registered in his name or mine?

Moreso, if you all have other scenarios that I haven’t thought of that may be crucial or beneficial to my situation, I’d appreciate it! Thanks!

TL; DR: the most important point is the method to which we can secure the full $7500 credit. I’m I’m almost 100% that my uncle makes enough to be liable for more than $7500 annually.
 
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Whoever is an owner (on paper, regardless of real life) would be able to claim the tax credit.

Filing the credit involves filling in VIN without sending in any other proof.

It's when the IRS requires proof in an audit, then just send them the car's title.

@Tam Sorry, I didn't mention that I wouldn't have enough taxed "income" to qualify for the full tax credit,

Another piece to this is, in either loan case, I could somehow get both of our names on the title and most problems would be solved?? << not sure if that's the case though.
 
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Google 8936 tax credit and read the IRS instructions - owner qualifies for credit which means sales contract and registration - sounds like your next McKeever needs to buy the car
Uncle - not sure how iPhone came up w McKeever (never heard that name before)
Lol, good point. I will look at the IRS instructions. Also, I mentioned that what if we co-signed or co-borrowed the loan or have both of our names show up on the registration/title of the car. You think that'd fix most of these problems?
 
Any owner of the vehicle is going to want to have insurance coverage for the car (whether that's a joint policy or otherwise would depend on the insurance company) but legally the owner of a vehicle remains liable so your uncle would be personally on the hook should you be in an accident serious enough to exceed the limits of the insurance coverage, or should you fail to pay tickets, etc. Not trying to be a debbie downer here but from a legal perspective your uncle may not be fully considering his potential exposure here. if you are going to go that route anyway, then you may want to make sure there is excess or umbrella insurance coverage in the multiple 7 figures to provide suitable protection and limit the likelihood someone comes after him personally. And from your perspective, if title is in his name, he could sell it out from under you at any time (we've all heard stories of family relationships going south...), although i'm a personal injury lawyer and not a divorce lawyer, I also think that depending on the state where you live, if he's married and later gets divorced, there may be a chance that this car becomes marital property and maybe his (ex)-wife ends up with it in the divorce. Basically there are all sorts of variables here that can't fully be predicted. just my 2 cents fwiw.
 
@nikolanj, ahh, I understand what you're saying. Another follow up question is, once the tax credit is filed for and say we're on an unsecured loan, couldn't I just have his named removed from the title and then the car would be solely under my ownership, but I'd still be paying the loan off (giving him the amount monthly)?

Sorry for asking so many questions, but I'd just like to figure out all the details and options that we have
 
I would assume (but again not my area of expertise) that if the car is not collateral for the loan (and therefore the lender wouldn't care), he could "Sell" the car to you or otherwise transfer title to you at which point you'd become the sole owner. You'll just need to drive carefully until then and cross your fingers that none of my other doomsday scenarios occur before you take over title.
 
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I would assume (but again not my area of expertise) that if the car is not collateral for the loan (and therefore the lender wouldn't care), he could "Sell" the car to you or otherwise transfer title to you at which point you'd become the sole owner. You'll just need to drive carefully until then and cross your fingers that none of my other doomsday scenarios occur before you take over title.
Hence why I've been leaning toward the unsecured loan route, BUT I've heard that Lightstream has gotten more strict with the people they've approved for the loan. Thanks for your insights @nikolanj !
 
1) Federal Tax Credit is not meant for reselling purposes. I am not sure about just a change in title names.

2) California State Rebate requires contacting its department if not owned in 30 consecutive months. I don't know why they want to talk unless they want to get the money back.

Definitely not using it as a reselling purpose, just the FULL tax credit is such a huge incentive to purchase now, but my credit isn't the best to secure a good rate or the credit itself.

And that is true about the CVRP! But why would they even bother after approving and sending the rebate to you? ACTUALLY, if I'd be the one applying for the rebate, and I were to drop my uncle's name from the registration, I'd still be retaining ownership.
 
I think with joint ownership, dropping one person out of the ownership would constitute either a sale or a gift. Any difference between the sale price and fair market price would also constitute a gift. Since the gift tax exemption is somewhere in the neighborhood of $14,000 per year and half of the car (depending on your configuration) would be worth well over $14,000, your uncle may be liable to pay gift tax of up to 40% on the remainder. So, if you went all out and did the $80,000 build (yay!), half of the depreciated value of the car may be around $35,000, minus $14,000 would come out to $21,000. He could be liable for up to $8,400 in gift taxes, making the federal tax credit moot.

I'm not a tax expert, but I look into tax laws very carefully. You may want to ask an accountant before you move forward with this!