Selling my Model3/implications on US federal tax credit

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Bigriver

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#2
Hi If i were to sell my model 3 soon that I got in December 28 2018. Would i still be eligible for the $7500 tax credit for 2018 taxes.
The IRS stipulates the following as one of the requirements to qualify for the credit: “You acquired the vehicle for use or to lease to others, and not for resale.” I don’t know what challenges or limits have ever been set on how long you must own it. I think selling it this soon would be highly challengable on whether you had plans for resale at the time you purchased it.
 

garsh

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I think selling it this soon would be highly challengable on whether you had plans for resale at the time you purchased it.
Bigriver is correct. It basically depends on whether the IRS would somehow choose to audit you, and if they decide to challenge it. None of us knows how they would choose to handle it. I've never heard of anybody getting denied (or audited) for selling their EV that quickly.

If you had bought it and immediately tried to flip it without putting any miles on it, that would be very suspect. I think the fact that you've owned it for a month and actually drove it and put miles on it makes you have a strong case. Personally, I'd go ahead and file for the credit if I were in that situation, but IANAL, YMMV, TANSTAAFL, OMG, YOLO.
 

FRC

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#4
Good points above. I would definitely take the credit. As an ex-CPA, I think you have very little to worry about. To deny the credit many unlikely events must occur. The IRS would have to choose you to audit. Then they would have to decide to audit your credits(not many audits look at every aspect of your return). The form to take the credit does not ask how long the vehicle was in service or if it still is, so you won't be fibbing. The agent performing your audit would have to determine that the vehicle is no longer in service. And if the IRS managed to jump through all these hoops and disallowed your credit(very highly unlikely), the result would be that you would have to repay the amount of the credit plus a very nominal amount of interest. You ain't gonna go to prison!
 

SoFlaModel3

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#6
This is so poorly written that you will still get the credit unless you have publicly claimed somewhere that this was your intent to resell all along no one can say otherwise. You bought the car in excitement but realized it wasn’t for you and had to sell it.
 

Ed Woodrick

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#7
The rule is intended for dealerships to not take the credit (but the banks do if it is a lease).

But also remember, that the buyer of the car should expect a decrease in the price of at least $7500.
 

mswlogo

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#8
He will probably lose more than $7500 on it, and that probably would cover him in case of an audit. As long as it shows he wasn't trying to profit from it, he'd probably be ok even in the case of an audit.
 

MrMannilow

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#9
He will probably lose more than $7500 on it, and that probably would cover him in case of an audit. As long as it shows he wasn't trying to profit from it, he'd probably be ok even in the case of an audit.
7500 + taxes + MSRP being much lower. I was looking at the same scenario but I'd be taking close to a 20k hit
 
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