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Powerwall for Sale, $5500
- Thread starter srk67
- Start date
That is what my CPA said as well. Also, she said that the solar credits rarely raise any audit red flags. Provide the correct paper trail in case of an audit, but you do not have to submit any documentation with the tax return. I wouldn’t take the chance of inflating the purchase price because it is not worth it in the long run...
Amit519
Roadster dreams!!
Also, taking a realistic view, would all sellers be reporting the selling price as income on their tax return?
So if the buyer gets a 1099 to claim the prize as income and the seller also has to claim the income from the sale, isn’t the government taxing the same product twice? I see that with cars and homes, but this seems like personal property.
I’m no CPA, but it sounds odd...
Amit519
Roadster dreams!!
The only reason the seller would need to claim the income is because they SOLD the prize and made money from the sale.
In the impossible case where the seller just transfers the prize to buyer with no money involved, then seller wouldn't be required to report any income and everything would be simple.
The Gov't isn't be taxing the same thing. The IRS is taxing 2 very different things: 1, the $8,600 value of the award and 2, the extra charged by seller. 2 entirely different things.
It's when sellers want to make money (and rightfully so) from their prize that things get complicated.
What may most likely will end up happening is that Tesla will report the $8,600 income to the IRS in the buyers name and the buyer will also claim fed ITC for whatever the selling price was.
While seller would most likely not report income from sale. I'm not trying to say that all people will commit fraud but in all honesty, how many people will not try to hide this income, given the chance? People know that there is no way for the IRS to establish the fact that they sold a powerwall and kept the money . Unless the buyer also reports to the IRS the sellers information and price paid, which at present the IRS doesn't seem to want on their Form 5695.
So to avoid all these headaches, I went ahead and told Tesla to install my referral powerwall and enjoy its benefits.
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bkp_duke
Well-Known Member
No, it works this way:
1) Winner of PW2 ASSIGNS it to someone else (i.e. in Tesla's eyes it is being given to someone else, and they will 1099 the new recepient).
2) Tesla does not know, or care, if you sold it.
3) If you claim the 30% ITC, this is where the paper trail starts that could get the original winner of the PW2 in tax trouble. You are claiming a tax credit (rightfully so) on something sold to you, but not by Tesla, but by the original recipient. If you were ever audited, you would pass just fine, but it might flag the seller for an audit for not claiming the income they received from you.
bkp_duke
Well-Known Member
Technically, you DID buy it, just not from Tesla. If you can provide a legit paper trail showing the costs of acquisition and installation, it should be a legit write-off.
If you are technically buying it from the original gift recipient (and not Tesla), why would Tesla need to send the gift buyer a 1099-MISC?
But, let's say you are correct in that you are buying it from an individual. The Residential Energy Credit form 5695 does not ask for who it was you purchased ITC eligible systems from. So, I guess, it's possible to file for and get the credit. But, in case of an audit, I assume you would need to have gotten SSN of the seller (original PW gift recipient).
Why is Tesla even going through all this trouble with taxes? They should just be giving it away, having already taken care of the accounting aspect of it.
Is Tesla also sending these to recipients of other referral prizes such as the 22" onyx wheels (for model X)? That's clearly listed online for $6,800.
Is Tesla also sending these to recipients of other referral prizes such as the 22" onyx wheels (for model X)? That's clearly listed online for $6,800.
Amit519
Roadster dreams!!
Whoever eventually receives the award, original award recipient or assigned buyer or "gift" recipient, gets the W9 from Tesla.
Tesla then sends out a 1099-misc for $8,600 to that individual. This individual then has to report this income. If the original recipient turns around and sells it then they need to report income and only then would the new buyer be able to claim FITC.
Correct me if I am wrong.
Amit519
Roadster dreams!!
I believe the threshold for reporting is $600. Anything over $600 in value is reported to the IRS.
If that's the case, Tesla would be sending out the tax forms to all wheel recipients. And if they did, all this discussion about what happens with PW referral taxes should have already been answered. We can just ask one of the dozens and dozens of people who've sold referral wheels.
Amit519
Roadster dreams!!
It's just a matter of time before Tesla gets caught up with everything else that they are working on and starts sending out 1099s for the referral wheels and powerwalls. The HPWC were below the threshold.
bkp_duke
Well-Known Member
If you are a corp and are writing these things off you MUST have a detailed paper trail. Without it, some execs will spend some time in Club Fed.
bkp_duke
Well-Known Member
Depends upon if they had people fill out a W9 or not to receive the wheels. We've heard from the PW2 recipients that they are asking for that info, so that is a strong indication of intent to file.
I received some small stuff from prior referral cycles (bag, jacket, wall charger) and none of them asked for W9 level info, but they were small potatoes compared to a PW2.
Amit519
Roadster dreams!!
The OP also lists the 22" black Onyx wheels for sale. @srk67, did you receive either a W9 or 1099 from Tesla for those wheels?
Or, for that matter, while we are talking about W9 and 1099, has ANY recipient of the wheels or powerwall received a W9 or 1099?
I received a W9 for my award powerwall. Haven't received any word for wheels yet, so no W9 for that yet.
View attachment 456752
Or, for that matter, while we are talking about W9 and 1099, has ANY recipient of the wheels or powerwall received a W9 or 1099?
I received a W9 for my award powerwall. Haven't received any word for wheels yet, so no W9 for that yet.
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HankLloydRight
No Roads
That's not how taxes work. Tesla gives you a prize worth $x. That $x is taxable income to you. You are obligated to report that as income to the I.R.S. Even below the $600 level -- that's just the level that companies are required to send out a 1099. If I pay someone $599 for "services rendered", they still have to report that income, even if I don't send them a 1099.
And no, for all other referral awards, no W-9s were filed or 1099s sent out. That's on Tesla. But if you are the recipient of such an award, you are still obligated to report that as miscellaneous income (for instance the Arachnid wheels).
The point is, even if you "give something away" (of value), that's taxable income to the recipient.
With regards to the PW2 awards, I spoke with one person who had one installed last year, filled out the W-9, but never got a 1099 for tax year 2018. I filled out a W-9 for my PW2 award this year (2019)... we'll see if I get a 1099 from Tesla by Jan 31st, 2020. It would be nice if they just sent them out already so I know what my tax liability will be for the "prize"!
(side note: I told the wifey that we're getting a PW2 installed as a prize!! YAY! I didn't mention we might have to pay ~$2k in taxes. )I don't think you get 1099s for the wheels because they are technically something they don't sell so they can assign value to it
bkp_duke
Well-Known Member
At one time they were sold, and they had a price. And there is always "reasonable market value" that can be assigned.
You sound like you've never been through an IRS audit, so I'm going to drop a nugget here: with the IRS in an audit you are wrong unless you can prove to them otherwise (i.e. CPA paper trail, etc. etc.). It may not be fair, but that's basically how it works.
