I think they never sold "forged 22s". Again, don't know but it's been a year since my first 22 in wheels and I never got a 1099
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Powerwall for Sale, $5500
- Thread starter srk67
- Start date
HankLloydRight
No Roads
Exactly. If you are audited and this comes up, the auditor won't give two **sugars** about if they were sold or not.. they'll work with you to find an appropriate "market value" of the wheels and tax you on that (maybe plus interest and penalties). There's no fooling the IRS auditor. Remember, they do their job 24x7x365.. it's not like there's something they haven't seen before.. they'll catch you long before you even realize it. They are GOOD at what they do.
I've been audited... and just to give you a sense for what these auditors are like, our auditor came in at 8AM in the morning and sat at our kitchen table to audit our two member LLC small business. He LITERALLY did not get up from the table to eat or drink or go to the restroom until he left the house at 5PM. I actually don't think he was human. So if you think you can get something by the auditor by saying 'oh, they never sold those 22" rims, so they have no value!!!' you've got a huge surprise waiting for you.
It’s the same as the wheels that are an option when buying a new X, and the same as the set you can buy separately online.
The online description might not have the word “forged”, but it is the same thing. Not sure, but unlikely, whether a CPA or lawyer would be willing to try defending the absence of that word if audited.
Model X 22" Turbine Wheel and Pirelli Scorpion Tire Package
I don’t see how the taxing of the PW “gift” would be treated any differently from the 22” wheels. I mean they also practically cost the same as well.
Kind of what I was trying to get at. Don’t expense it. Make lives of loyal customers easier. But that’s probably a pipe dream.
bkp_duke
Well-Known Member
Tesla has admitted that the referral program was a huge expense. They will for sure write off / down everything they can to make the books look better.
Edit- tax bracket should be 22%
I-was super excited at the opportunity to purchase a pair of powerwalls for about a $3500 discount. I spoke to the CPA, spoke to several Tesla reps and ran the numbers. There is an ad floating around for 2 powerwalls at $12,000. Seemed like a great deal, however, being in a 22% tax bracket and getting hit with those taxes, basically killed the deal for me. Below is my math, let me know if I am off base...
Tesla purchase
2 power walls, gateway and installation-
$14500 +$4500 (installation)= $19,000 - $5700 tax credit= $13,300 total cost
Private purchase
2 powerwalls, gateway and installation- $12000 + $3500 (installation fee)=$15,500 + $3410 (tax on referral prize)= $18,910
$15,500 x .30= $4650 tax credit
$18910 - $4650= $14260 total cost
I-was super excited at the opportunity to purchase a pair of powerwalls for about a $3500 discount. I spoke to the CPA, spoke to several Tesla reps and ran the numbers. There is an ad floating around for 2 powerwalls at $12,000. Seemed like a great deal, however, being in a 22% tax bracket and getting hit with those taxes, basically killed the deal for me. Below is my math, let me know if I am off base...
Tesla purchase
2 power walls, gateway and installation-
$14500 +$4500 (installation)= $19,000 - $5700 tax credit= $13,300 total cost
Private purchase
2 powerwalls, gateway and installation- $12000 + $3500 (installation fee)=$15,500 + $3410 (tax on referral prize)= $18,910
$15,500 x .30= $4650 tax credit
$18910 - $4650= $14260 total cost
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HankLloydRight
No Roads
You didn't mention solar. From what I've heard from a few people, you can only get the 30% tax credit if you are installing solar, or already have solar installed and you're just adding a PW.
But yeah, the 1099 tax liability is making these seemingly "good deals" not so good. You're lucky to be in Florida without a personal income tax and a low federal tax rate.
But yeah, the 1099 tax liability is making these seemingly "good deals" not so good. You're lucky to be in Florida without a personal income tax and a low federal tax rate.
Solar panels are on the way- should be done right after hurricane season (fingers crossed). There is no state sales tax on solar products, either, so the comparison is apples to apples with used. I’m wondering if some of there’s referral powerwalls will go unclaimed since the the tax hit is so high. Congrats, you owe the feds $4600!
HankLloydRight
No Roads
If anyone with one or more PW2 awards is close to buying any new or used Tesla, you can apply the credit as a discount to the car, which, amazingly enough, isn't taxable, it's treated as a showroom discount. That's what I did with my two PW2 awards last year (before they were transferrable). I found a buyer willing to do the deal to save $1500 off the price of his new Model 3, I ordered the car on my Tesla account (with his contact info), they applied the PW2 credit, and he paid for and picked up the car. Oh, and paid me for the credit applied, less $1500. And then we transferred the car to his Tesla account. He also got to take the full $7500 tax credit.
We went this route with three Powerwalls last year. We wanted to use the credit for solar but couldn't apply it directly. We applied them to a new Model 3, sold the car at list price and then applied the cash towards our solar panels. Combined with the ITC federal tax credit, we saved about 60% on our solar system.
Amit519
Roadster dreams!!
Thats correct, the powerwall is only eligible for the federal ITC if installed at the same time as the solar system or added on to a pre-existing solar system. Powerwall are not eligible for federal ITC even if the solar system system is installed after the powerwall was installed.
Energy Incentives | Tesla Support
MelaniainLA
Member
Darn I got 3 Powerwalls recently but they said you cannot apply the $ Toward a car! Otherwise I would have gotten a 3 for nearly nada! Oh well!
Amit519
Roadster dreams!!
Let me see if I understood this correctly:
>The original pw2 referral award recipient tells Tesla that you are the assigned recipient of this award and Tesla installs the system at your house (assuming you have solar or are adding to a solar system in place)
>Tesla sends you the 1099 as the original award recipient is completely out of the picture. As far as Tesla knows, YOU are the one receiving the award and thus the 1099.
>You pay Tesla out of pocket the additional installation cost $3,500, that is not covered in the award.
>You pay the original award winner $12,000 for assigning you as the recipient.
>Now when you are ready to file your 2019 taxes, you are figuring out what is eligible for the federal ITC.
>I'm not a CPA, but IMHO, the ONLY expense that is eligible for ITC is the additional installation costs of $3,500
> As you were the recipient of the award directly from Tesla (remember, Tesla doesn't even know you paid the original award winner $12,000) as far as taxes are concerned, you received a free gift from Tesla.
> As far as the IRS is concerned (at audit time) the only expense that YOU actually incurred was the additional installation cost of $3,500.
>The fact that you paid the original award recipient $12,000 isn't eligible for Fed ITC, since the original recipient NEVER had the award to begin with, he assigned it to you directly. He sold you something he never actually owned.
The only way YOU could apply for ITC on the $12,000 was if the original recipient took delivery of the pw2 (and the 1099 as well) and THEN sold it to you. But now the seller gets the 1099 and not you.
But this wouldn't work as Tesla requires that the pw2 be INSTALLED at the recipient's address, in this case, the original award winner.
So if the award winner wanted to sell you the pw2 then he would have to first let Tesla install the pw2, then take apart the system to resell it. This could possibly void the PW warranty.
I don't think Tesla will allow award recipient to have them drop it off in the garage, so that they award winner can resell it without having to uninstall it.
So, @Shadious, your costs for the 2 pw2 bought for $12,000 could be:
>$12,000 (paid to original award recipient) <not ITC eligible
>$2,450 [70% of the $3,500 (installation cost) as 30% of installation cost is covered by ITC]
>$3,410 Tax liability for award (at 22% FL tax rate on 2 pw2 award $15,500)
Grand total of 2 pw2 (if bought from private party):
$12,000+$2,450+$3,410=$17,860
$17,860!!
That's $4,560 more than had you bought from Tesla directly in the first place.
Assumptions behind this tax liability as reported in W9 and 1099 by Tesla: cost of 2 pw2 >$13,000 ($6,500 each),
>installation credit $1000 credit, I doubt they will pass on 2 $1000 installation credits.
>$1,500 (gateway cost)
So W9 of $15,500 sent to YOU.
In conclusion, I don't think you can claim ITC on $12,000 that you paid seller (seller never legally owned the pw2).
Comments welcome.
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bkp_duke
Well-Known Member
We've been through this in this thread, as long as you have a documented paper trail, it doesn't matter if you buy the powerwall from Tesla or a 3rd party. The full purchase price qualifies for the ITC.
Verified this with our CPA.
Amit519
Roadster dreams!!
So then the original award winner acted as a middle man in this transfer and took what could be considered as a commission.
Is the CPA able to cite the tax codes allowing this $12,000 "commission" to be eligible for ITC?
Amit519
Roadster dreams!!
Amit519
Roadster dreams!!
It have a model x custom order that is being built and pending installation of the referral powerwall. What was the process to transfer the credit for PW towards car purchase? What is the $ amount credited towards car purchase in lieu of pw award?
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The problem as I see it is that to quote my former boss “the juice is not worth the squeeze.” People selling the power walls are not discounting them enough to make it worth while. In my case best case scenario I would actually pay more with private than with Tesla. My point being that that’s power walls are not worth $6500 each, they are worth $6500 minus the tax you will be paying on them. In my case, I would need to save $1500-$2000 to make it worth my while, meaning they would need to sell for $4500 or less. The math just doesn’t work out if I pay any more. It’s too bad, because it would be a sweet deal, and having battery back up in Florida would be nice.
HankLloydRight
No Roads
You have to talk to your Tesla Energy rep who is handling the PW2 installation for you. It might be too late as you've already ordered your car and started the PW2 install. Have you done a site survey yet? Do you have engineering plans drawn up? It's probably too late, but you can ask to see if you can get credit instead.
Exactly. The tax (federal and state) issues are really making this a disaster for everyone involved. Because everyones' tax situation is different, and everyone pays a different effective tax rate, it's impossible to predict the exact tax impact until you do your taxes next year. So in most cases, I would suspect the buyers to buy at a price including some estimated tax impact, but will probably make out better in the end.
I know in my case since I'm self-employed, I can make a larger SEP (retirement) contribution reducing my effective tax rate. So it doesn't matter if I'm in the 28% or 35% marginal tax bracket, I probably end up paying a much lower effective tax rate due to that and other deductions.
But for purposes of the PW2 award, buyers and sellers are going to have to assume a 'worst case' state and federal tax impact, so the buyer's don't get hosed at the end of the year. The question is, what is that 'worst case' tax rate? 25%, 30%, 35%? In California, it might be as high as 50%.
