Poll: Tesla US EV Federal Tax Credit ends Q1 or Q2 ???

[mongo]

The right to claim and the amount of tax credit you can claim is based on the date on which you acquired the vehicle, where acquired means that title has passed to you under your state law. That's likely to mean that it's based on the date the title was issued. (IANAL). So, I shouldn't want to take delivery just before the end of a quarter after which it will drop, because there will be a lag between delivery and the title being issued.

Still a good idea to start away from dates on the end of change quarters. However, the state's actions are not a concern to the IRS.

Per previous IRS rulings, if you drive it, it's in service.
From Electric Vehicle Not Placed In Service by Year End, Credit Denied

Although "placed in service" is not explicitly defined for purposes of section 30D, other sections of the Code provide guidance. Section 38(a) provides a business credit against tax with respect to property in the first taxable year in which qualified property is placed in service by the taxpayer. See also sec. 1.46-3(d)(4)(i), Income Tax Regs. Property will be considered placed in service when it is in a condition or state of readiness and availability for a specifically assigned function. Id. subpara. (1)(ii); see also Consumers Power Co. v. Commissioner, 89 T.C. 710 (1987) (referring to investment credit for purposes of section 38(a)). [Trout v. Commissioner]

 

[Raechris]

We’ll be lucky if they barely make it to Q2. I’m 100% sure that Q3 is out of the question

We are half way through Q2. I believe Tesla will game it to July 2nd.

 

[voip-ninja]

We are half way through Q2. I believe Tesla will game it to July 2nd.

That's the $3750 question so to speak.... will Tesla appease their shareholders by delivering the maximum # of cars possible this quarter or will they slow walk and divert some of their deliveries in order to maximize the tax credit for the remainder of 2018?

 

[mongo]

That's the $3750 question so to speak.... will Tesla appease their shareholders by delivering the maximum # of cars possible this quarter or will they slow walk and divert some of their deliveries in order to maximize the tax credit for the remainder of 2018?

I claim false dichotomy!
Some shareholders are waiting for their cars and would benefit from the extended tax credit.

 

[FlatSix911]

The timing of the 200,000 threshold is based on the sale of the vehicle.

The right to claim and the amount of tax credit you can claim is based on the date on which you acquired the vehicle, where acquired means that title has passed to you under your state law. That's likely to mean that it's based on the date the title was issued. (IANAL). So, I shouldn't want to take delivery just before the end of a quarter after which it will drop, because there will be a lag between delivery and the title being issued.
The year for which you claim the tax credit is based on putting the car into service (i.e. you start driving it).
I think it's worth noting that InsideEVs estimated flat deliveries of the Model 3s in April. Was a short month for selling days, but still, it increases the chances for the 200,000 to be delayed until July.

In California, the sale is completed at the time of delivery.

 

[Dr. J]

Still a good idea to start away from dates on the end of change quarters. However, the state's actions are not a concern to the IRS.

Per previous IRS rulings, if you drive it, it's in service.
From Electric Vehicle Not Placed In Service by Year End, Credit Denied

@mongo gets gold star for research, but may not have noticed this in the quoted ruling:

The provision in the law provided that a credit was available if:

· The vehicle was acquired by the taxpayer on or before December 31, 2009 and

· Placed in service on or before that date

Note the and. It would appear taking title per your state's process (if this is the meaning of "acquired") and placing the vehicle in service are both necessary.

 

[Dr. J]

I note that persnickety panel-gap- and paint-defect-averse buyers should be mindful as the tax credit phase-out approaches. If delivery is refused, Tesla's process seems to require assignment of a new VIN, which apparently happens at the end of the manufacturing process, which means another delay for delivery.

 

[dhrivnak]

That's the $3750 question so to speak.... will Tesla appease their shareholders by delivering the maximum # of cars possible this quarter or will they slow walk and divert some of their deliveries in order to maximize the tax credit for the remainder of 2018?

And if cars are diverted to Canada or other markets they can both work on production for investors and time Q3 to hit 200,000

 

[mongo]

@mongo gets gold star for research, but may not have noticed this in the quoted ruling:

The provision in the law provided that a credit was available if:

· The vehicle was acquired by the taxpayer on or before December 31, 2009 and

· Placed in service on or before that date

Note the and. It would appear taking title per your state's process (if this is the meaning of "acquired") and placing the vehicle in service are both necessary.

I do beg to differ my distinguished and flattering colleague. This specific case was regarding a car purchased in 2009 (titled), but not received until 2010 (placed into service).

In both cases the taxpayers ordered and submitted payment for an electric car before the end of 2009. Both received an acknowledgement of their order along with the vehicle identification number (VIN) of their specific vehicle and, by agreement, the title to the vehicle passed to the taxpayers. But in both cases the vehicle itself wasn’t delivered to the taxpayers until the summer of 2010.

So, in this case, the acquiring/ titling happened way before being put in service/driven. So the root issue being even though they bought it, it wasn't used/ placed into service until after the credit expired (and may not have existed/ been built either). This sets the precedence that tilting is different from being place in serivce. The IRS form is based on the placed into service date with no clarification/ tie to title processing in the instructions.

I stand by my claim that the purchase/ drive off the lot date is sufficient to claim the Federal credit, regardless of State delays in processing.

 

[voip-ninja]

And if cars are diverted to Canada or other markets they can both work on production for investors and time Q3 to hit 200,000

Maybe.... I don't know how much Canadian demand there is for the current configuration.

 

[mongo]

Maybe.... I don't know how much Canadian demand there is for the current configuration.

This thread is showing 4 DS with ~200 people each providing calling to update delivery. (every little bit helps)

 

[Moderatefan]

Maybe.... I don't know how much Canadian demand there is for the current configuration.

I think it's not that much an issue of demand, but of limited number of SCs plus limited delivery timelines. From Canadian VINs thread, someone in SC stated they expected deliveries to start closer to mid-May, which means it may only be 6 weeks before Q2 end. And they only have 6 SCs.
Which I think means they'll likely only be able to deliver around 3K regardless of demand. This is almost negligible for tax credit purposes.

But if Elon takes his time with shutdowns, maybe he can avert 200K that way.

Update: just looked at the thread above, it seems even deliveries in May are unlikely, i.e. only 4 weeks of deliveries.

delivery will be in early June.
For stats: 1st day line waiter, non-owner, 27 Mar order.

 

[mongo]

I think it's not that much an issue of demand, but of limited number of SCs plus limited delivery timelines. From Canadian VINs thread, someone in SC stated they expected deliveries to start closer to mid-May, which means it may only be 6 weeks before Q2 end. And they only have 6 SCs.
Which I think means they'll likely only be able to deliver around 3K regardless of demand. This is almost negligible.

But if Elon takes his time with shutdowns, maybe he can avert 200K that way.

I got a call this afternoon as well. Left a message. Delivery first couple of weeks in June. Toronto delivery will be at the Internation Center at YYZ (Pearson). Left a callback but goes to a mailbox.

Facility - The International Centre

 

[mongo]

May be more in Canada...

Mandy mentioned either 2000 (or maybe 3000?) orders they had to work through.

 

[03DSG]

May be more in Canada...

This is just the Toronto delivery.

 

[mongo]

This is just the Toronto delivery.

Yah, I was updating/appending my previous 800 car post for that region. The thread I linked is hopping today.

 

[Moderatefan]

May be more in Canada...

They may have more orders, but some are getting July estimates. IDK. I guess it depends on how heroic those detailers and sales people are. What sacrifices they are planning to move the inventory. And hope nobody complains about panel gaps and paint chips in the process...

 

[Barsad]

If you can't afford anything more than the Model 3 SR, you may not make enough to get the full benefit of the $7500 tax credit. It only applies to federal taxes owed for the year you buy the car. If you don't owe that much in taxes, you lose the residual. Tesla is delaying the roll out of the cheapest version because more people who will be buying the cheapest version will still have all or most of their taxes eliminated by the $3250 credit.

Dolt-son, I bought one of the first Leafs and of course got the full $7,500 credit. But the fact that you think someone who doesn't want to pay 54K-60K for a car owes less than $7,500 in total federal taxes shows that you are pretty far out of touch.
JG

 

[Barsad]

I do not recall that "$7,500 off" was ever a promise. I remember that when I reserved, I was pretty much counting that it won't be there due to S/X sales. Now, it seems I will get a chance to claim it if I buy a more expensive configuration. So, it is a choice I did not count on.

That's funny, I distinctly remember a promise in 2016 that Model 3 standards would be in the driveway by today. In fact, "Early 2018" was even written on my reservation screen. By any measure, those people who stood in line on March 31, 2016 were promised that they would have the car before the full tax credit ran out, based on Musk's own public predictions on delivery. I suppose you can call the first-production-buyers jumping the line policy a new "choice I did not count on." But if a choice costs you $20K more than you were planning on, how is it a fair choice?
I'm always amazed at the lengths people go in the Forum to defend Tesla... I'm not a Tesla troll, just pointing out something that's fairly obvious, which is that Tesla decided that its wealthier customers were more of a priority and should get more discounts.
JG

 

[EfficientWatts]

That's the $3750 question so to speak.... will Tesla appease their shareholders by delivering the maximum # of cars possible this quarter or will they slow walk and divert some of their deliveries in order to maximize the tax credit for the remainder of 2018?

Based on what went on during the earnings call yesterday I think the slow walk scenario is more likely than you think.