armmynissanleaf
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EV Tax Question

Wed Dec 06, 2017 8:50 am

I keep seeing posts (not necessarily here but just in general) that if you're planning to buy an EV do it before the end of the year so that you get your tax credit. But has anyone here talked to a tax adviser at all(or is a tax adviser)?

Thank you.
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RonDawg
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Re: EV Tax Question

Wed Dec 06, 2017 9:09 am

Until Trump gets a unified version of this bill on his desk, and he signs it, nothing is going to change. Trump wants it on his desk by Christmas but that's unlikely to happen. Some folks are recommending you buy or lease before 2018 since nobody knows what will get forwarded to him or when. Tax adviser isn't really going to help here until we know what (if any) changes are going to be made.
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mwalsh
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Re: EV Tax Question

Wed Dec 06, 2017 9:43 am

If you have any doubts about your tax situation you should always talk to a tax adviser, but for most of us it's a simple matter of filling out form 8936 and entering the deduction from line 23 on line 54 of a 1040. Easy peasy.
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TomT
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Re: EV Tax Question

Wed Dec 06, 2017 9:54 am

There is already a lot of speculation that the profit margins on various of these cars is either negative or very thin. I don't want to raise that debate in this thread, and I know it depends on how the accounting is done, ZEV credits, etc. But the point is that there is only so much that a manufacturer is going to be able to do on the price lowering side before it is just not worth it to make the cars anymore. I doubt all the affected models can absorb the full $7500 loss that way. I think there will be a combination of price reductions (or various kinds of discounting), consumers paying more, lower sales volumes and some models being dropped.

Or of course there could be some other market disruption that might offset the tax credit issue, such as ZEV credits becoming more valuable (unlikely) or a breakthrough in the cost of batteries, etc.

The repeal of the credit could actually be seen as a good thing from the perspective of the companies who would have run out earliest. This would prevent that scenario where they have to compete against other makers who have up to a $7500 price advantage due to still having unexpired credits.

Also remember that there are two Republican senators from South Carolina where BMW assembles vehicles and two Republican senators from Tennessee where Nissan assembles its vehicles. Given the financial interest of Nissan and BMW in preserving the credit, the fact that Republicans can only afford to lose two votes, and the fact the credit isn't a big line item, I'm thinking the chances of the credit surviving are fairly high.
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LeftieBiker
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Re: EV Tax Question

Wed Dec 06, 2017 12:05 pm

RonDawg wrote:Until Trump gets a unified version of this bill on his desk, and he signs it, nothing is going to change. Trump wants it on his desk by Christmas but that's unlikely to happen.


It's actually VERY likely to happen. The only real question is whether or not the Reconciliation process sends him a bill to sign that kills the EV credit, or retains it. People who are counting on Republican bickering to stall the bill for many weeks are mistaken.
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armmynissanleaf
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Re: EV Tax Question

Wed Dec 06, 2017 2:05 pm

Thank you for all your comments everyone.
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RonDawg
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Re: EV Tax Question

Wed Dec 06, 2017 6:25 pm

LeftieBiker wrote:
RonDawg wrote:Until Trump gets a unified version of this bill on his desk, and he signs it, nothing is going to change. Trump wants it on his desk by Christmas but that's unlikely to happen.


It's actually VERY likely to happen.


By Christmas? I am doubtful.

The only real question is whether or not the Reconciliation process sends him a bill to sign that kills the EV credit, or retains it.


Which is my point. We don't know what the details are yet, because Congress hasn't nailed them down yet.
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baustin
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Re: EV Tax Question

Wed Dec 06, 2017 6:31 pm

armmynissanleaf wrote:I keep seeing posts (not necessarily here but just in general) that if you're planning to buy an EV do it before the end of the year so that you get your tax credit. But has anyone here talked to a tax adviser at all(or is a tax adviser)?

Thank you.


It is a good idea to talk to a tax adviser, if you are a considering a purchase. The EV Credit is not a refundable credit, and you need an income high enough to take advantage of it. If you are leasing, it is not an issue, since the company leasing the car takes advantage of the credit and passes the savings on to you. The difference with the leasing companies, is how much of the credit they actually pass on to you. Nissan has been passing the full $7500 credit. GM has been reported to only pass on $2500 of the credit.
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LeftieBiker
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Re: EV Tax Question

Wed Dec 06, 2017 8:25 pm

By Christmas? I am doubtful.


Based on what? I'm basing my view on the facts that:

* Both the Trump Administration and the Republicans who control Congress want this done by Christmas, and have promised that it will be.

* There are no insurmountable differences between the two bills.

* The Democrats have no way of blocking the process of which I'm aware.


What you are saying is kind of like 'Ok, we know there is a large animal outside the tent, we're eating bacon, and it's pawing at the door. We still have no reason to think it will come in here.' ;-)
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smkettner
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Re: EV Tax Question

Wed Dec 06, 2017 10:47 pm

No matter when the change is passed, what will matter is the effective date.
Very likely to be effective Jan 1 even if it passes in January.
But as said many times before we will not know the details until it passes.
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