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Tax credit and leasing

Discussion in 'Model S' started by Jeffruby, Mar 11, 2014.

  1. Jeffruby

    Jeffruby Member

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    Guys,

    Any way to least is car and still get the tax credit?
     
  2. Lloyd

    Lloyd Active Member

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    Only if the lease company agrees to pass it on to you in the form of a cap reduction.
     
  3. apvbguy

    apvbguy Banned

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    I know that nissan will use the credit to lower the car's basis price for the lease.
    AFAIK tesla does not offer leasing
     
  4. Jeffruby

    Jeffruby Member

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    Thanks. I plan on using my s as my business car. I do much better leasing, but don't wanna get killed on shifty lease. Also don't wanna lose that credit.
     
  5. KERSPWR

    KERSPWR Member

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    The lease company will get the credit ($2500/yr x 3yrs). Thus the lease needs to be at least 3 yrs long. There is no way for you as the lessee to get this directly from the Feds. However, everything is negotiable and you may try to get it credited to the last payments or perhaps reduce the CAP cost. The only leases for Model S are from private banks so you should negotiate this as part of the deal. Given that the residual values are quite high it would seem that decent rate leases should be out there. However, most that I have seen have very low residual values that really only make sense for business use with plans to buy the car for the low RV at the end of lease.
     
  6. selsrog

    selsrog Member

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    Jeffruby: which advantages has leasing an EV over buying it (using a loan)? I'm doing the latter as I do not see any (on the contrary).
     
  7. Jeffruby

    Jeffruby Member

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    As car use is for work, you can deduct the lease payments. Cannot deduct purchase payments, ie-finance
     
  8. FlasherZ

    FlasherZ Sig Model S + Sig Model X + Model 3 Resv

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    #8 FlasherZ, Mar 12, 2014
    Last edited: Mar 12, 2014
    EDIT: I checked with those more knowledgeable than I (enrolled agent before the IRS). Consult your own tax advisor.

    I was told that you can deduct purchases as a combination of interest expense + depreciation expense. There's a limiting factor here in that section 179 + depreciation expense + bonus depreciation can't exceed $11,000 or so per year for the car (and even then some states don't allow bonus depreciation), so you will have to consider a longer depreciation schedule to recoup the purchase -- this could be up to 15 years! So, this would seem to be in favor of leasing when it comes to high-cost cars for business use, but if you desire you can indeed deduct a purchase.

    That said, if you intend to drive a lot it may be that you'll get more bang for your buck using the 56.5 cents per mile deduction instead of actual expenses, and if so you can't consider either lease or purchase payments as part of the equation. There are some conditions that would allow you to take interest expenses in addition to the mileage discount, but I was told that at today's interest rates, it may not be worth it to deduct the interest expense. The important thing when you use this method is to keep a log of every trip - source, destination, mileage, reason for trip.

    Hope this helps...
     
  9. djsohl

    djsohl Member

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    Have you found a lease company offering the model s?
     
  10. FlasherZ

    FlasherZ Sig Model S + Sig Model X + Model 3 Resv

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    Some banks will set up a custom leasing arrangement for businesses. I am not aware of an "off-the-street" leasing company that markets the Model S with a lease, but I'm sure there are those out there that will set them up on a case-by-case basis. This thread describes a lease arrangement set up by a bank, who laid claim to the $7,500 tax credit.
     
  11. Jeffruby

    Jeffruby Member

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    Per the leasing 3rd parties I've contacted. Both evaluated the 7500 and claimed it is for personal use and cannot be used by myself, or the bank. So if Lease = loss of tax credit.
     
  12. apvbguy

    apvbguy Banned

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    that's too bad, because they are misinterpreting things. Nissan applied the $7500 to the basis price of the LEAF that I am leasing through them
     
  13. FlasherZ

    FlasherZ Sig Model S + Sig Model X + Model 3 Resv

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    That's not the case, as is evidenced by the post I referenced above, and the IRS's own guidance on the issue. Plenty of web sites talk about the leaseholder getting the benefits.
     
  14. selsrog

    selsrog Member

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    Ok. Over here in Belgium the government is not making any difference in how the 'work' car is funded. The applied rules stay the same. Currently 120% deductibility for EV's. So you can imagine the interest currently. ;-).
    ICE cars have up to maximum 75% deductibility. Freight cars are exceptions.
     

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