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Question about the $7500 tax credit...

Discussion in 'Model S: Ordering, Production, Delivery' started by Seven7, Oct 23, 2013.

  1. Seven7

    Seven7 Member

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    #1 Seven7, Oct 23, 2013
    Last edited: Dec 17, 2015
    Edited
     
  2. brianman

    brianman Burrito Founder

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    IANAL (I am not a lawyer)
    YMMV (Your mileage may vary)
    etc.

    I expect these (underlineds) to be two distinct things. Elaborating...

    1. If you take delivery of the cars in different years (2013 and 2014) then they don't compete for the credit.
    2. The "short holding time" might impact when/if you can legitimately claim the credit on the first vehicle (with no relationship to the second vehicle). I don't know what/if the holding time requirement is for the tax credit though. Hopefully someone else will chime in.
     
  3. texex91

    texex91 Banned

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    Obviously consult your CPA.

    However, I was told you can file the $7500 credit even if you owned it for a day, as long as it was titled in your name.

    Also, for next year you can file another credit on another car (assuming they are still available).

    what are you thinking about ordering??
     
  4. ACDriveMotor

    ACDriveMotor Member

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    Get him early Tex!
     
  5. Seven7

    Seven7 Member

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    #5 Seven7, Oct 23, 2013
    Last edited: Oct 23, 2013

    Oh I plan on asking my CPA, he has the final say on anything tax related.

    ETA: Not doing it for a +, I was going to order that originally but was talked out of it by sales, was also talked out of pearl white paint (easier to fix) and almost talked out of twin chargers but i got them and the HPWC anyway. That is the first time a sales person has told me NOT to order something because I would be better off (in their opinion) without it. I have to respect that.
     
  6. birdsaresmarter

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    #6 birdsaresmarter, Oct 23, 2013
    Last edited: Oct 25, 2013
    You'll definitely want to talk to your tax advisor about this. The fuzzy thing I see in the regs is the vehicle must be new and "not acquired for resale". Don't know what facts and circumstances would support "not acquired for resale". Don't know if there are any letter rulings or case law to test these related issues. Local/state incentives commonly have specific holding period provisions such as CA clean vehicle rebate project requires 3 years or they can ask for some of the $ back.
    See here for reference on Fed regs http://www.law.cornell.edu/uscode/text/26/30D
    Tesla is not close to the phase out volume at this time.

    UPDATED:

    As I had more time to read through fine print myself vs. glancing quickly for general subject matter/reference, I'm editing to end with above info. This is the inherent flaw in rushing to be helpful and making observations on anything even with a zillion caveats of "maybe' or "I think perhaps". Apologies for any confusion. While the regs state that they "will establish" recapture rules, I couldn't find any under 30D that seem particularly relevant. Also, there are some important "and" conditions that I did not see when initially skimming for holding period references.

    I'm just pointing out public information though. I'm not a tax advisor and not attempting to give any tax advice. Just suggesting ways to maybe find info to prepare for Q&A with your tax advisor in context of your circumstances.
     
  7. brianman

    brianman Burrito Founder

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    Another flavor of the question...

    Suppose you buy an S in 2013 and then trade it in (to Tesla) in 2014 for an X. Can you claim the credit on both vehicles?
     
  8. Seven7

    Seven7 Member

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    After reading the links supplied by forum member Birdsaresmarter I would have to say that a second $7500 credit would be a no go until three years have passed. I will ask my accountant anyway, but it looks well spelled out by the feds. Thanks Birdsaresmarter!
     
  9. EarlyAdopter

    EarlyAdopter Active Member

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    #9 EarlyAdopter, Oct 23, 2013
    Last edited: Oct 23, 2013
    Not sure were you guys are getting these notions of 3 year holding periods from. If you have a link to a source from the IRS on this related to 30D, please share.

    Otherwise, I'd direct you to the IRS bulletin Internal Revenue Bulletin - November 30, 2009 - Notice 2009-89 which calls out only that:

    (1) The vehicle is placed in service by the taxpayer in a taxable year beginning after December 31, 2009, and is acquired by the taxpayer after December 31, 2009;
    (2) The original use of the vehicle commences with the taxpayer;
    (3) The vehicle is acquired for use or lease by the taxpayer, and not for resale; and
    (4) The vehicle is used predominantly in the United States.

    And that acquired is defined as:
    .07 Acquired. A vehicle is not “acquired” before the date on which title to that vehicle passes under state law.

    There is no "holding" period that I've seen. There is no limit on how long you must keep the car. So long as it was purchased for by you, the tax payer, and put into use, which is defined as titled by a state to you, then you can claim the credit regardless of what you do with the vehicle from then on. However, no one else may later claim the credit on the same vehicle (no double dipping on the same car). The "not for resale" is intended to prevent dealerships from claiming the credit on cars they flip.

    Also, there's no cap on the number of credits you can claim, so long as you meet the criteria above for each vehicle and have enough tax liability to offset. Buy a Model S and a Leaf in 2013 and have at least $15,000 in tax liability? Claim two credits of $7500. Buy a Model S in 2013 and trade it in on a Model X in 2014? Claim a credit for each car each year.

    Standard disclaimers: I am not a tax attorney, and even if I was I am not your tax attorney.

    - - - Updated - - -

    This refers to an old EV credit from the 90's, not 30D.
     
  10. brianman

    brianman Burrito Founder

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    Presumably this doesn't imply that I can never sell the vehicle. So what's the minimum duration for "not for resale" to become legally defendable?
     
  11. texex91

    texex91 Banned

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    What!!!! What salesperson talked you out of that??? What did they say to sway you away from P+? Hmmmm, not happy....
     
  12. Seven7

    Seven7 Member

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    Their opinion was the numbers didn't work at an extra $6500 for use in an area that has no hills and is laid out in a grid street wise. The only place you will pull some gravity around here is the on ramp to I-75.
     
  13. texex91

    texex91 Banned

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    Wow, they need to go back to sales training, as you don't need to have hills to enjoy the benefits of a P+.

    There were things that the gallery told me (and I already knew) not to spend on--extended leather, lighting, etc. But EVERYONE in the gallery said get the P+ if you can $$.

    The handling and suspension is used on a daily basis for me and keeps me planted as I drive not matter where I go.

    $6500 is worth EVERY cent of having the +.

    I'm not distracting from a P, but for only $6500 the + is a no brainer (as it' sounds like you have 21" anyways).
     
  14. Gizmotoy

    Gizmotoy Active Member

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    As as been discussed here before, it seems like the Tesla "sales" people are simply trained to reinforce whatever you appear to be leaning towards. Something along the lines of "Is the + worth it?" "You don't really need it, the P is great as it is!" and "I love the Interior Lighting Package" "Yes, it's really worth the money!"
     
  15. ACDriveMotor

    ACDriveMotor Member

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    I think I have to agree with Tex. Seems odd to get the 21's and not get the + package. I might go so far as to say I would get the + over the 21's if that was possible.
     
  16. Gizmotoy

    Gizmotoy Active Member

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    A lot of people probably would.
     
  17. Jace_91

    Jace_91 Member

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    Im pretty sure it wouldn't be consider for resale as long as you are not a licensed dealer.

    In response to earlyadopter: Are you able to claim 2 EV credits if you purchase 2 cars in one year? That would be even more indicative that you would be able to claim one in 2013 and one in 2014.
     
  18. yobigd20

    yobigd20 Well-Known Member

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    Even if that recapture clause applies to this situation (which it doesn't), selling the vehicle is not a "recapture event" per it's definition. A recapture event is only when that an electric vehicle is converted to be a non-electric vehicle. So unless you are converting your Model S to run on gas or selling it to someone knowing that they are going to convert it to gas, that clause does not apply here whatsoever.

    And yes, you can buy 10 Model S's and claim 10 $7500 credits in the same tax year if you feel like it. though you're liability would need to be >$75,000 to get it all back.
     
  19. EarlyAdopter

    EarlyAdopter Active Member

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    Long enough to register it with your state DMV.

    Correct. As long as you have at least $15,000 in tax liability in that year to offset 2 credits, and you bought and titled both cars.
     
  20. Barry

    Barry Member

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    A few years ago, I had a negative tax bill (i.e., a refund for more than I paid in taxes) because of multiple kids in college and the education tax credits. Is this credit different in that it's capped at your tax liability?
     

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