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Form 8936 and Instructions for 2011 Tax Credit

Discussion in 'North America' started by S-2000 Roadster, Dec 11, 2011.

  1. S-2000 Roadster

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    Hi folks,

    I've seen many threads discussing whether Tesla Motors actually filed for certification, along with a few links to IRS pages. However, I've not seen any mention of which Form we must attach to our tax return in order to take the $7,500 credit for purchasing a Roadster 2.5 (in 2011, for me).

    A quick search at the IRS shows a 2010 Form 8936, so I assume it would be the same form number for 2011.

    Does anyone have experience filing this form? Any suggestions or warnings?


    While I'm here, I have a couple of related questions:

    One of the IRS pages says that the person taking the credit must have title under state law. How is this affected when the car is purchased with a loan? Does the bank hold the title until the loan is paid in full?

    When filing 2011 taxes, does the purchaser have the responsibility to provide a copy of the certification? I assume that we can all just trust that Tesla Motors has proper certifications on file and up to date with the IRS for the 2011 year for all Roadster 2.5 sales.
     
  2. neroden

    neroden Happy Model S Owner

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    No, the title will be in the name of the purchaser, at least in all states I know about. The lender usually has to make court filings in order to transfer the title if you don't pay the loan.

    With a leased car, on the other hand, the leasing company holds title.
     
  3. bolosky

    bolosky Member

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    When I filed mine (in 2009), I just filled out the form and didn't deal with Tesla's part. I never heard back from the IRS, so either it was OK or they never looked at it.
     
  4. hcsharp

    hcsharp Active Member

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    #4 hcsharp, Dec 16, 2011
    Last edited: Apr 3, 2012
    The rules are slightly different than they were in '09. Form 8936 the credit is $7500 (line 3, 4 for '11). In 2009 the IRS was not paying much attention to this credit. Now they are due to increased abuse. In many cases they are asking for a copy of the invoice. I recommend filing a paper return (as opposed to electronic) and attach a copy of your invoice to the return. You don't have to worry about the certification by Tesla until they sell 200,000 cars.

    If your tax liability is less than 7,500 (unlikely if you could afford it in the first place), you can't carry any unused credit forward unless your Roadster is used at least partly for business. In that case you need to fill in Part II and also fill out form 3800. Page 2 of form 4562 is where you determine the business use % based on miles.

    I write tax compliance software for a living and talk to hundreds of accountants every year.
     
  5. strider

    strider Active Member

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    I filed mine in 2010. Tesla gave me an extra copy of my invoice to include which I kept for my files (I filed electronically). It was simple. This year I'll be filing for the EVSE credit (in my last house there was already a spare 220V outlet so I just used that).
     
  6. Pantera Dude

    Pantera Dude Member

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    I presume the tax credit would only apply to new cars and not used?
     
  7. Lloyd

    Lloyd Active Member

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    Yes New Only
     
  8. hcsharp

    hcsharp Active Member

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    Generally yes, new only. But the actual code section only says you have to be the "first user" of the vehicle. This was where the abuse started and why the IRS began paying more attention to these claims. There have been cases of cars sold to dealers or others who claimed the credit without actually registering the car, and then re-sold them as if they were new, conveniently not warning the buyer that there was no EV credit.
     
  9. TEG

    TEG TMC Moderator

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    What about dealer demo cars sold to someone already with 1000s of miles on the odometer?
     
  10. hcsharp

    hcsharp Active Member

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    It would probably work if nobody had already claimed the credit for that car. You have to enter the VIN on Form 8936. I know of several that were filed for 2010 model year cars that were sold in 2011 and they had no problems.

    Picture yourself in front of an IRS auditor. He or she asks to see the invoice for when you bought the car. If the invoice looks like you bought a new car regardless of miles, then it would fly.
     
  11. Slackjaw

    Slackjaw Member

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    Hi, just a "sanity check" here... Our accountant seems to be saying that we didn't qualify for the full $7500 tax credit. We live in NJ, bought a new Roadster in June 2011 and definitely exceed the $7500 tax liability. Did the rules change a lot? Did more than 200,000 EVs get sold or something? Any chance he's right? (We may not have understood him anyway; hopefully this is the case!).

    Thanks for any input.
     
  12. Beavis

    Beavis Signature 991

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    I am guessing you are in AMT or the spread between AMT and regular tax is less than $7,500.
     
  13. Tommy

    Tommy Member

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    As I recall, it's 200k per manufacturer so obviously you're ok there. Why not buy a copy of Turbo Tax from one of the discounters and run your financial particulars yourself. You can do the entries pretty fast is you round the numbers and not get specific on addresses, names etc. You're just checking to see if you qualify for the full credit."quick and dirty". Probably about an hour's worth to do the numbers.
     
  14. Slackjaw

    Slackjaw Member

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    Good point but he seemed to be saying we specifically qualified for only $2500 because "the rules had changed". Maybe it's time "the accountant changed"...

    Thanks
     
  15. Beavis

    Beavis Signature 991

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    The rules didn't change so I can think of only one reason he's not getting the full credit (unless there's a blatant input error which would be pretty easy to see). Check form 4626.
     
  16. hcsharp

    hcsharp Active Member

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    Get a new accountant. The credit can be taken against AMT. The rules have not changed with respect to the amount - it's still $7,500. The only reason I can think that you might not get the full credit is because your tax liability is less than 7,500. It's a non-refundable credit so you can't take home more than your total tax.

    @kroneal Form 4636 is for corporate AMT. I believe SlackJaw is trying to take the personal tax credit. In any case AMT has nothing to do with it.

    I know tax law pretty well.
     
  17. hcsharp

    hcsharp Active Member

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    I can think of another reason why you might not get the credit - if you bought your Roadster used. But that would result in NO credit, not a reduced credit. Make sure he knows it has a 53 kwh battery. That matters.
     
  18. Tommy

    Tommy Member

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    Good point, the accountant might of thought the battery was 5.3 kwh and entered that number which would have resulted in the minimum credit of $2,500.
     
  19. qwk

    qwk Model S P2681

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    Yeah, it sounds like you have an accountant who is not any good with basic math. Believe it or not, I have seen this a few times. When it's not their money on the line, they could care less.
     
  20. Slackjaw

    Slackjaw Member

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    Hmm... Well, it's worse than that; when pressed (and with the combined weight of TMC behind me) he admitted that he had made a typo and just put $2500 in the box which should have said $7500. Thanks to everyone who replied! We owe $5K less than we were told.

    The guys's not bad enough that we'll get a new accountant for this but I may have the returns checked by a third party.
     

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