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Wonder how many people are going to flip their Model 3?

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If you are one of the lucky ones to get the $7500 tax rebate you won't want to flip as this could legally effect you eligibility for the rebate. You cannot sell the reservation as it is prohibited by Tesla. It looks like they will be adding a second factory in Europe and may complete the buildout of the Fremont early. There will probably be an estimated 500k orders by the time production starts. Probably 20% will drop out by then leaving only around 400k orders to be filled. . This is about 10 months of production if they can get all three factories at full production. If it works like the Model X someone can order last minute, after production starts, and order a loaded car and move up towards the top of the list past those who ordered less optioned cars. Therefore, like the Model X even though there were a rumor of four to five people selling their new car this was never verified. As soon as people realized they could order a fully loaded car and get it in less than 8 weeks the after market sellers disappeared.
 
If you are one of the lucky ones to get the $7500 tax rebate you won't want to flip as this could legally effect you eligibility for the rebate.

How could it affect you legally?
From the IRS:
The vehicles must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must commence with the taxpayer and the vehicle must be used predominantly in the United States. For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law.

If you buy the car, have it delivered, title it in your name, drive it for a day and decide to sell it the next day, seems that you are eligible. There doesn't seem to be a holding period.
 
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How could it affect you legally?
From the IRS:


If you buy the car, have it delivered, title it in your name, drive it for a day and decide to sell it the next day, seems that you are eligible. There doesn't seem to be a holding period.
He is talking about this part: "The vehicles must be acquired for use or lease and not for resale." If you buy it to flip, you are clearly acquiring it for resale. While there is no holding period, that seems to violate the provision. No idea if IRS had ever enforced this.
 
He is talking about this part: "The vehicles must be acquired for use or lease and not for resale." If you buy it to flip, you are clearly acquiring it for resale. While there is no holding period, that seems to violate the provision. No idea if IRS had ever enforced this.

Yeah. But there is no way to prove that it was bought for resale unless you advertise it before you own it.

I bought it
Registered it.
Drove it.
Realized I don't like it as much as I thought or wanted to buy a pony instead or I bought it for my wife as a surprise who didn't like it since the frunk wasn't to her liking.
Advertised it for sale the next day.
 
I'm sure that some people out of the 275k or so reservation holders (give or take a few k depending on how many cars each person reserved) will attempt to flip their Model 3, but I suspect the vast majority won't flip.

Why give up the opportunity to experience ownership of a historic, game changing automobile? I like making money too, but what's the point of money if you can't have fun with it sometimes?

If people have money to speculate on a Model 3 and think it will be that hot, they might as well invest in TSLA. I'm sure that anyone who put down 40k on a Model X Signature with intent to flip is now sorry they tried to flip rather than invest in the company stock.
 
Still owe the IRS 100% of the credit back.

See 26 CFR 1.30-1 (b) (4) and 26 CFR 1.30-1 (b) (5)

Nope.

I don't see this case in there. 26 CFR 1.30-1 - Definition of qualified electric vehicle and recapture of credit for qualified electric vehicle.

There is only a recapture event (defined in (2) (1) ) if any of the three conditions exist.

None of those conditions apply to selling a car that will still be used as an EV.

(4) and (5) only applies to recapture events.
 
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I'm sure that some people out of the 275k or so reservation holders (give or take a few k depending on how many cars each person reserved) will attempt to flip their Model 3, but I suspect the vast majority won't flip.

Why give up the opportunity to experience ownership of a historic, game changing automobile? I like making money too, but what's the point of money if you can't have fun with it sometimes?

If people have money to speculate on a Model 3 and think it will be that hot, they might as well invest in TSLA. I'm sure that anyone who put down 40k on a Model X Signature with intent to flip is now sorry they tried to flip rather than invest in the company stock.

1. People can order more than one.
2. People can both put in an extra order as well as buy the stock. Way back, the Mazda Miata was selling for 100% over the MSRP. There could be a heck of a return on a refundable $1k deposit held for only 2 years...or not...
 
My early reservation number car I'll flip...in about 30 years when it's a classic, fully stock barn find. It will be the post of the year on bringatrailer.com and they'll be amazed when it sells for $3 million...due in part to the never opened tchotchke in the glove compartment that Elon sent me for waiting in line in the rain.

I'll keep the late res# car for three years then replace it with the new flying Tesla Model WTF
 
Yeah. But there is no way to prove that it was bought for resale unless you advertise it before you own it.

I bought it
Registered it.
Drove it.
The next line is: knocked 10% for depreciation ..

Thankfully, Tesla will not allow reservations on to a secondary market. That pretty much kills the speculators in my opinion, because very few would have the 35k+ front money.
 
I don't think that would be an issue for speculators. But who is going to pay a premium to have the Model 3 early?
For the no option base version of Model 3, you clearly attract a price sensitive customer so they won't pay extra. And a customer that wants a full option is given priority in production by Tesla.
Will there be people willing to sell their Model 3 for a premium? Yes. Will there be a significant demand for it? I think not.
 
How could it affect you legally?
From the IRS:


If you buy the car, have it delivered, title it in your name, drive it for a day and decide to sell it the next day, seems that you are eligible. There doesn't seem to be a holding period.

It comes down to intent. The IRS regulation says the car cannot be intended for resale to be eligible for the rebate. There is a big difference between keeping it for several months and then selling it. On the other hand if you purchased it, took delivery and the next day sold, it IRS could probably ligitably say you intended to sell you when you purchased it. Also the new buyer is not eligible for the rebate because the rebate are only available if you purchased it directly from the dealer/manufacturer. Because most state have a 6-8 percent sales tax you have to figure that into your flipping equation. There were several who purchaded Model X's to resale who were never able to sell it as Tesla is turning around orders for loaded cars very fast.