I'd still get professional advice, but I think so-signing the loan just makes loan responsibility fall to him if you don't pay. I'm not sure if that would allow him to qualify to receive the federal tax credit since he won't be the one purchasing the car. While you can probably have both of your names on the registration, it's the title that comes with all the financial responsibility. To be honest, I have no idea how having joint ownership of the title affects the the tax credit, but I do believe at least he has to be on the title in the purchase in order to qualify. If he's on the title (whether you are or not), complications follow in trying to transfer full ownership to you.
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Federal Tax Credit HELP!
- Thread starter hotony13
- Start date
With that aside, what, in your opinion, is the best method to go about everything? the more in detail, the better! lol
Tam
Well-Known Member
Let your uncle's name be on the title either by his own or together with yours.
Let your uncle take both Federal and California incentives.
If you want to take that money, once your uncle got the money, tell him to give that to you.
After 30 months, transfer or remove your uncle's name from the title.
Of course, you need to consult the professionals for gift tax as it involves 2 people.
That would mean that he (my uncle) has to own at least part of the car in order to get the tax credit, because I would not be able to receive the full credit
If your federal income tax is not $7500 or more, then yes you wont get the full credit. However, when i filed my income taxes, they only asked for the VIN and did not ask for any sort of owner verification. That being said, there's always the risk of an audit but hey who knows.
What's the likelihood of an audit nowadays anyway? lol
and how would you suggest I go about my situation? love opinions
who knows haha. But if your uncle doesn't mind the liability, then register the car in his name, and then make sure BOTH of you are on the same insurance plan so there is no issues in case something happens.
If your uncle can get a loan you can't though, can't you just apply for the same loan and have him co-sign with you? in which case, you can just go thru tesla and make it easier.
siucity
Button Pusher
I'm not sure what you're asking? Whether it's just his name, or both of your names, you still don't want to be the one claiming the credit as you won't get the full amount.
JoeCoolMan24
Member
If you don't make enough to earn the full tax liability, THEN DON'T BUY THE CAR!!!!!!
Totally kidding, I just expected some jerk to have screamed that by now.
Totally kidding, I just expected some jerk to have screamed that by now.
Tam
Well-Known Member
There's no need to file gift tax between spouses.
But when a gift exceeds an allowable amount outside of spouses such as a parent giving a child $16,000 in a year, that gift tax needs to be filed.
Whenever there's a change in a title (who are not spouses), that can be a trigger for a gift tax depending on the value of the title such as a million dollar house or a $35,000 Tesla car.
Gift Tax: Do I Have to Pay Tax When Someone Gives Me Money?
If I was your uncle, the car title would be in my name only. If the loan is unsecured, it has nothing to do with the car so your uncle would be your loan company. You will make payments to him and he will hold the title until the loan is paid off. He doesn’t need you making a late payment and ruining his credit. He will then make the payments on the unsecured loan (assuming he has liquid cash, he can make those payments on time even if you are late.) The loan will be for the full purchase price (minus deposits) but you can’t deduct the tax credit from that.
You need a WRITTEN CONTRACT! Don’t even think about doing anything related to this transaction without a written and signed agreement with your Uncle.
The Tax Credit will be claimed by your uncle who legally owns the car. This will just reduce his taxes and depending on how much he prepaid on his taxes he may not actually get a check for $7500 and that won’t be until after April 15, 2019. Your contract with him should state that if he successfully gets the 7500 credit then he will apply 7500 to your loan and he will submit an extra principal payment to the unsecured loan company (which won’t lower your payments but will wipe out payments at the end of the loan.)
Not sure what this does to insurance. He might have to get the insurance and list you as a full time driver.
BTW - If he has good credit, he’d probably get a better rate on a secured loan.
You need a WRITTEN CONTRACT! Don’t even think about doing anything related to this transaction without a written and signed agreement with your Uncle.
The Tax Credit will be claimed by your uncle who legally owns the car. This will just reduce his taxes and depending on how much he prepaid on his taxes he may not actually get a check for $7500 and that won’t be until after April 15, 2019. Your contract with him should state that if he successfully gets the 7500 credit then he will apply 7500 to your loan and he will submit an extra principal payment to the unsecured loan company (which won’t lower your payments but will wipe out payments at the end of the loan.)
Not sure what this does to insurance. He might have to get the insurance and list you as a full time driver.
BTW - If he has good credit, he’d probably get a better rate on a secured loan.
There’s not really a gift tax - there’s only an inheritance tax and that’s irrelevant unless your estate is going to be very large (not sure how rich this Uncle is!). This 15000 limit everyone gets confused about exempts the amount that has to be tracked against the final inheritance which has to exceed $5.5M for single (or $11M for a married couple) before there would be a tax owned.
In any case, there’s no gift relevant here because he’s going to write a contract to pay payment to the uncle to purchase the car.
Thing is, I talked to him about being able to put down $22500 together on the car, and that $10000 of that he would get 100% within a year or less after fed tax credit + CVRP rebate. And the rest of the 12.5K I’d have it back to him around the same time. The loan payments themselves I’d send to him monthly until the loan is paid off, of course! But especially since we’re gonna try applying for LightStream, they have a Rate Beat program that matches and beats any other rate that you are approved elsewhere.
The thing about title is that, especially because we’re not in the same household, I’d rather not prolong the duration for which he is the title holder (loan will probably be 72 month period), just for the sake of liability related issues.
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