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Question About Tax Credit after Sale

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
10,881
8,583
Maine
I have been notified that it is time to order my Tesla. Unfortunately circumstances have arisen that appear to prohibit me from purchasing the car. I would be happy to purchase the car and immediately transfer the same to someone at exactly what I pay plus state taxes with me retaining the Federal Tax Credit. Is anyone interested?

You cannot legally claim the Federal Tax Credit if you do that.
The car cannot be purchased for resale.

Especially so when you're obviously trying to make $7,500 in profit on the deal.
 

EkBuZ

Member
Mar 9, 2016
72
36
North Dakota, USA
I have been notified that it is time to order my Tesla. Unfortunately circumstances have arisen that appear to prohibit me from purchasing the car. I would be happy to purchase the car and immediately transfer the same to someone at exactly what I pay plus state taxes with me retaining the Federal Tax Credit. Is anyone interested?

Don't buy the car and sell it, just transfer your account to someone else and let them be the first owner of the car. It's a lot cleaner, they just need to pay you the $1000 deposit you have down. You can't claim the tax credit if you buy to resell.
 

ebmcs03

Active Member
Dec 22, 2017
2,188
1,351
So Cal
I have been notified that it is time to order my Tesla. Unfortunately circumstances have arisen that appear to prohibit me from purchasing the car. I would be happy to purchase the car and immediately transfer the same to someone at exactly what I pay plus state taxes with me retaining the Federal Tax Credit. Is anyone interested?

Hope the IRS fines you. And audits all your tax returns for the rest of your life.
 

drawfour

Member
Mar 10, 2018
774
732
Seattle, WA
Dear ebmcs03,

I'm sorry that I apparently am not up to snuff on tax credit law. I am not trying to scam anyone, including the IRS. I am sorry that I offended you and anyone else on this site.
You're trying to retain a federal tax credit for a car that you do not plan to use in any capacity. That doesn't even sound maybe a little illegal to you?
 

Ticobird

Lovin the Tesla Life
Oct 30, 2014
377
251
Hazel Green, AL
I have been notified that it is time to order my Tesla. Unfortunately circumstances have arisen that appear to prohibit me from purchasing the car. I would be happy to purchase the car and immediately transfer the same to someone at exactly what I pay plus state taxes with me retaining the Federal Tax Credit. Is anyone interested?
The Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service website/webpage states specifically "The vehicles must be acquired for use or lease and not for resale." My interpretation of the provisions of the Federal EV Tax Credit and recommendation is you should be careful how you proceed.
 

MarkeR2002

Member
Feb 8, 2016
34
91
Midwest

Ticobird

Lovin the Tesla Life
Oct 30, 2014
377
251
Hazel Green, AL
That is a great question. I would refer you to a tax professional for the best answer in tax matters like this one. I searched the internet for a few minutes and could not find an IRS.gov answer. Having said that I would venture that if the original purchaser actually used the vehicle for a period of time before selling it then the original purchaser could legitimately claim they did not buy it for resale. I do not think the period of time the vehicle is used by the purchaser is important. What is important is the original purchaser does not purchase the vehicle only to resell it after siphoning off the Federal EV Tax Credit exactly like Coleman Comment #2 stated.
I did run across this Tesla Motors Club thread Will I still get my $7500 Tax Credit if I sell my car within the tax year I bought it where it was stated that a California EV state tax credit would need to be returned to California if the original purchaser sold the vehicle before the 30th month of ownership.
 

ebmcs03

Active Member
Dec 22, 2017
2,188
1,351
So Cal
That is a great question. I would refer you to a tax professional for the best answer in tax matters like this one. I searched the internet for a few minutes and could not find an IRS.gov answer. Having said that I would venture that if the original purchaser actually used the vehicle for a period of time before selling it then the original purchaser could legitimately claim they did not buy it for resale. I do not think the period of time the vehicle is used by the purchaser is important. What is important is the original purchaser does not purchase the vehicle only to resell it after siphoning off the Federal EV Tax Credit exactly like Coleman Comment #2 stated.
I did run across this Tesla Motors Club thread Will I still get my $7500 Tax Credit if I sell my car within the tax year I bought it where it was stated that a California EV state tax credit would need to be returned to California if the original purchaser sold the vehicle before the 30th month of ownership.
At least California is clear about it
 

cpa

Active Member
May 17, 2014
3,242
4,406
Central Valley
Serious question, with this rule, how long does someone need to own the vehicle before they are able to resell it? Just wondering.

This is one of those facts-and-circumstances questions. There is no line drawn in the sand.

First, what is your intent? Second, how likely can you achieve your intent? Here are some scenarios:

You buy the car intending to use it for many years. One week after you buy it, you die (sorry to be morbid.) Your survivors need to sell the car for financial and economic reasons. Clearly, you did not intend to die. I would have no problem claiming the credit on your final tax return.

You buy the car in the middle of a divorce. Two weeks later, the divorce is final, and you have to sell the car pursuant to the divorce proceedings. I would not claim the credit. The imminence of your divorce and the property settlement would prove that you quite possibly had no intent to keep the car, or a minuscule chance to keep the car.

You buy the car just after taking a new job making 3x the amount of money in your old job. One month after you buy the car you realize that you are working for the mob, and do not wish to continue employment with such a company. No jobs are available and you need the cash to look for employment and pay bills during your unemployment. I would claim the credit. Clearly this was unforeseen.

You buy the car on the speculation that you will be able to start a lucrative business driving celebrities around your home town of Atlanta. You do no due diligence before buying the car, thinking that your income will be ample to make the monthly strokes on the car loan. Upon buying the car, you determine that you have many hurdles to surmount to be licensed in Georgia to drive people for hire, including a $1,500 course to receive a special driver license. You need to get out from the debt on the car, so you sell it. Clearly, you did zero investigation before purchasing this car, so while your intent may have been sincere, it was unlikely that you could achieve it. I would not claim the credit.

While my stories are pure fiction, situations like these occur all the time with income taxation. In facts-and-circumstances cases, the burden of proof is always on the taxpayer. Once the taxpayer provides a satisfactory burden of proof, the ball then is in the taxing authority's court to challenge or accept.
 

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