Interested in Selling Model 3?

[tga]

Since proving purchase with the intent to re-sell is nearly impossible (and highly unlikely) it's a risk I'm sure some will take. It's simply not enforceable.

The IRS can deny any credit (or deduction) they want and send you a tax bill (with added penalties and interest, of course); it happens all the time. At that point, for all practical purposes, the burden of proof shifts to the taxpayer to prove they are eligible for the credit/deduction.

If they start suspecting people are reselling 3's and claiming the credit illegally, you can bet they will start taking a second look at all returns with a form 8936 that claim a VIN starting with 5YJ. It's low hanging fruit for them.

 

[JeffK]

Plus with Tesla doing so well, there are a lot of shorts and haters coming out of the woodwork...

Tesla will soon be the first automotive company to hit 200,000 EVs so next year is going to be interesting.

 

[kengchang]

Seriously, IRS is the last agency you want to mess with. Tax Audit is going to be fun...........NOT

 

[206er]

The IRS can deny any credit (or deduction) they want and send you a tax bill (with added penalties and interest, of course); it happens all the time. At that point, for all practical purposes, the burden of proof shifts to the taxpayer to prove they are eligible for the credit/deduction.

Really wonder if this will start happening to people given the current political leadership in DC.

 

[TrickyDimitri]

The IRS can deny any credit (or deduction) they want and send you a tax bill (with added penalties and interest, of course); it happens all the time. At that point, for all practical purposes, the burden of proof shifts to the taxpayer to prove they are eligible for the credit/deduction.

If they start suspecting people are reselling 3's and claiming the credit illegally, you can bet they will start taking a second look at all returns with a form 8936 that claim a VIN starting with 5YJ. It's low hanging fruit for them.

Given how easy it is to find somebody trying to sell their reservation, I would bank on the IRS specifically looking closer at people who file form 8936 for a Model 3. Low hanging "fruit" is right.

 

[johnster007]

The IRS can deny any credit (or deduction) they want and send you a tax bill (with added penalties and interest, of course); it happens all the time. At that point, for all practical purposes, the burden of proof shifts to the taxpayer to prove they are eligible for the credit/deduction.

If they start suspecting people are reselling 3's and claiming the credit illegally, you can bet they will start taking a second look at all returns with a form 8936 that claim a VIN starting with 5YJ. It's low hanging fruit for them.

Disagree. It's simply not worth going after a measly $7500. Have you ever been audited?

 

[JeffK]

 

[EVNow]

Disagree. It's simply not worth going after a measly $7500. Have you ever been audited?

You should look at MNL for early years of tax credit in '12. Lot of issues with tax refunds delayed a lot for a lot of people.

 

[johnster007]

I took the credit in 2012 and 2013 with no issues but I didn't have refunds due in either year so maybe that's the difference. OK I'm bored of talking taxes. See you guys in another forum.

 

[Stolz25]

I'd probably sell mine if I was offered $100k in cash

I'll take $95k!

 

[ummgood]

Another thought... Before I start let me say I don't plan on selling my car and plan on keeping it. But here is a possible loophole...

I live in Texas and I have a reservation. Technically after I buy my car it won't be titled or licensed until I physically walk into the tax office and title it myself. This is one of the limitations of Tesla selling to owners in Texas. What gets given to the buyer is a Certificate of Origin. As far as I know that certificate has no assignment of owner on it. At that point a buyer in Texas could hand the car and Certificate of Origin over to another buyer and they could be the first to title/license the car.

This means the following... (Please correct me if I am wrong)
1. The person who is registering the car would pay the tax. No tax would be paid until the title takes place so there isn't 2 people paying taxes in this case.
2. I believe according to the IRS the person buying the car would qualify for the Tax credit since they are technically the first user and person registering the car.

Any thoughts on this?

I will say that I AM NOT SELLING MY CAR. I only have 1 reservation. I was just trying to think of ways that could avoid some of the pitfalls of selling a car that hasn't really been used by the person who made the actual reservation.

 

[JeffK]

2. I believe according to the IRS the person buying the car would qualify for the Tax credit since they are technically the first user and person registering the car.

So if Tesla reports a name to the IRS and the new owner applies for the tax credit, these will match up or no?
We don't know if it's only the DMV reports.

 

[ummgood]

So if Tesla reports a name to the IRS and the new owner applies for the tax credit, these will match up or no?
We don't know if it's only the DMV reports.

True this is a good question that I don't know the answer to. What I do know is it might not be considered tax fraud if both users don't claim the credit AND the person is the first one to title. It might mean that someone might get audited but with a good attorney they could probably get the charges dropped. I would have to read the exact wording. It might raise the likelihood of an audit.

Another question is would Tesla have your SSN to report this? I don't know maybe an existing Tesla owner from Texas could put in their thoughts.

 

[jsrawa]

I can't be the only one around here that is a little irritated with all this talk of selling reservations. It's a free country and you can do as you please but I have waited patiently and let Tesla have my 1K interest free for a year, I think it's wrong and it's clearly not what Tesla intends and you know that if you read the terms of your reservation.

 

[tga]

I live in Texas and I have a reservation. Technically after I buy my car it won't be titled or licensed until I physically walk into the tax office and title it myself. This is one of the limitations of Tesla selling to owners in Texas. What gets given to the buyer is a Certificate of Origin. As far as I know that certificate has no assignment of owner on it. At that point a buyer in Texas could hand the car and Certificate of Origin over to another buyer and they could be the first to title/license the car.

You also get a bill of sale. I'm not familiar with TX, but in the states where I've done registrations, you need both the Certificate of Origin and the bill of sale to title and register. The CO proves the car exists, that the manufacturer owns it, and has the right to sell it. The bill of sale transfers ownership from seller to buyer.

So for the second buyer to register, you'd need a bill of sale from Tesla listing "Buyer B" as the buyer instead of "Buyer A." Every state I know of does not allow you to "chain" bills of sale unless all intermediaries are licensed dealers; ie, Buyer A needs to complete their purchase and get a title in their name, which they can use to sell to Buyer B.

 

[ummgood]

You also get a bill of sale. I'm not familiar with TX, but in the states where I've done registrations, you need both the Certificate of Origin and the bill of sale to title and register. The CO proves the car exists, that the manufacturer owns it, and has the right to sell it. The bill of sale transfers ownership from seller to buyer.

So for the second buyer to register, you'd need a bill of sale from Tesla listing "Buyer B" as the buyer instead of "Buyer A." Every state I know of does not allow you to "chain" bills of sale unless all intermediaries are licensed dealers; ie, Buyer A needs to complete their purchase and get a title in their name, which they can use to sell to Buyer B.

Maybe but in Texas Tesla isn't a "Licensed Dealer" either.

 

[ummgood]

Oh and I didn't claim to know if my scenario would work. I just mentioned it as a possible loophole.

 

[Porsche]

IRS should be dismantled...

 

[JeffK]

IRS should be dismantled...

Naw, it's a necessary evil. Your taxes go to great things (and sometimes some questionable things).

I've also been really impressed about how quickly I get my returns in recent years. It sure beats my state refund check which seems to take ages.

 

[John D]

I have an early reservation and I will likely be a seller.

Thx

I have an early reservation but need the money. Out of work for months so I won't be buying the model 3 I ordered. Let me know how to transfer quickly and legally.