Tax Rebates

[Vitaman]

Not sure where to post this but I need some advice from someone who is tax savvy.
I bought 2 EVs this year (A Model S to be delivered in Nov. and an i3 that we picked up 2 days ago).
I will be able to use the 7,500 Fed and 5,000 St credits and wanted my Father in law to utilize other one.
So he bought the BMW and it is being titled in his name. The State of Georgia allows a one time gift of an automobile to a family member without paying 6.75% of the car's value in ad valorum taxes. Instead you have to pay a nominal transfer fee.
Does anyone know if the car can be gifted immediately after it is registered with the State or whether it has to be in his name until the end of this year?
The BMW Finance Dept thought that it could be gifted any time, whereas my Father in Law's accountant thought that a gift could raise red flags regarding the tax credit.
Thanks in advance.

 

[brianman]

Sorry for the somewhat OT, but very nice on your vehicle choices and your gift decision.

 

[Bobbyducati]

are you saying he bought the BMW from you? and then was titled in his name? or he is the original owner (which contradicts what you said about buying two EVs)? I ask because only the original purchaser of the vehicle when *NEW* can claim the tax. not a secondary owner, even if its immediately after purchase. Im actually in a similar boat where ill be giving my tax credit to my father cause he can use the full tax credit (i have too many deductions and would end up missing about $5-600). Ive analysed the tax form, and it appears as if you could just put down the vin and claim the tax, no proof of registration is asked (on that specific form at least). Im going to be playing it safe and just add him as a co-owner unless until i can get the specifics on whats needed. Sorry i can't provide any more help than that, im sure someone else will. also, what i said applies only to the federal credit, no idea how GA works.

heres the fed irs form for reference

 

[Vitaman]

He is the original titled owner but only for tax purposes.
We are driving it on a daily basis. As soon as legally possible we want to put it in my wife's name and we will reimburse him for the price of the car less the tax credits.
Was hoping someone else has had a similar experience.
Thanks Brian for your thoughts.
The i3 is a blast....my wife is completely in love with it. It's also good training for me to get used to the plug in drill.

 

[Ed Chan]

He is the original titled owner but only for tax purposes.
We are driving it on a daily basis. As soon as legally possible we want to put it in my wife's name and we will reimburse him for the price of the car less the tax credits.
Was hoping someone else has had a similar experience.
Thanks Brian for your thoughts.
The i3 is a blast....my wife is completely in love with it. It's also good training for me to get used to the plug in drill.

Here is the tax code regarding the tax credit:

26 U.S. Code § 30D - New qualified plug-in electric drive motor vehicles | LII / Legal Information Institute

By my read, there is no length of ownership requirement for the federal tax credit. Not sure about the Georgia state rebate, but California requires you to own the vehicle for quite some time.

Having said that, be aware you may run into other issues regarding a gift (and return gift of cash)... Essentially, you can do special one time gifts that reduce your tax-free inheritance limit (estate tax exemption), or you can give $14,000/year/person tax free. And, if the tax man is having an especially bad day, he may say that your father actually sold you the car and now you owe back sales tax! Now, will you get caught? Probably not, but you should know what could happen if you don't plan well. Suggest you see a real attorney who specializes in estates and/or a cpa if you want to stay by the book. I am not a lawyer or CPA, but I am very well versed in these matters managing my family.