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Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Tue May 01, 2012 3:26 pm
by Valdemar
LOL. No wonder claiming EV credit now flags your return.

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Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 7:46 am
by zarwin
Thought I would leave this here, might find it useful. Using material from MNL user Weatherman and myself, this is a consolidation of it into one place regarding the 7500 credit being reduced by AMT/TMT.

http://goo.gl/l3w8W" onclick="window.open(this.href);return false;

-Zarwin

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 8:14 am
by Weatherman
To put it in its most simple form...

Since 2011 and 2012 Nissan LEAFs qualify as New Qualified Plug-in Electric Drive Motor Vehicles, the application of the Personal Credit is subject to Section 30D(c)(2)(b) of the tax code, which states:

(B) Limitation based on amount of tax

In the case of a taxable year to which section 26 (a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of—

(i) the sum of the regular tax liability (as defined in section 26 (b)) plus the tax imposed by section 55, over
(ii) the sum of the credits allowable under subpart A (other than this section and section 25D) and section 27 for the taxable year.



For 2011, unless your regular tax liability is reduced by the foreign tax credit, section 26(a)(2) does not apply. Therefore, your personal tax credit is limited by the difference between your regular tax liability plus any additional taxes imposed by the AMT (Section 55), and the sum of credits allowable under subpart A (other than Section 30D and 25D) and Section 27 for the taxable year.

This means that, if you took no additional credits under subpart A, your credit under Section 30D can not exceed your regular tax liability, or your AMT (whichever is larger).

Therefore, not only is the AMT not a limitation to your credit, it may, under certain circumstances increase your available credit under Section 30D.

For example, if your regular tax liability is $5,000, but the tax imposed by Section 55 increases your total tax by $2,500, you can take a $7,500 tax credit under Section 30D of the tax code, even though that's more than your regular tax liability for the year.


The CP12 notice from the IRS is true, for "some credits", however it is not true for the credits specified in Section 30D of the tax code.

The simplest defense against the CP12 notice is to refer to Section 30D(c)(2)(b) of the tax code.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 8:42 am
by gmuzhik
Weatherman: Thank you for this post. This gives me some hope. You state that if you do not have a foreign tax credit, the AMT TMT limitation does not apply. Unfortunately, I DO have a foreign tax credit of $96. Does this say that my $96 credit is costing me $3300 of my $7500 EV tax credit? (My total tax liability is more than $7500 which is not the issue for me). If true, I wonder if I can resubmit my tax return and delete the foreign tax credit.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 9:12 am
by Weatherman
If Section 26(a)(2) does apply, it simply means your maximum allowable credit may be a bit smaller.

In your case it would be your regular tax liability reduced by $96 (your foreign tax credit), or your AMT, whichever is the larger number.


Just a quick disclaimer... I'm not a CPA or a tax attorney. But, the law is very simple, and tax preparation software, like TurboTax, is correct in its calculations. Knowing the tax code puts you in a powerful position when dealing the IRS, but if they aren't cooperative, you might want to seek professional advice..

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 9:38 am
by gmuzhik
Thanks for the clarification. Disclaimer noted! As far as Turbotax doing the right calculations, either they or the IRS are in error because Turbotax gave me the whole $7500. I appreciate any clues that help me to fight this, i.e. tax code references. I will pour over the codes. I found them on http://www.taxalmanac.org" onclick="window.open(this.href);return false; and http://www.law.cornell.edu/uscode/text/26/55" onclick="window.open(this.href);return false;. At least, now we know what to search for.

If anyone else has resolved this, please post how it was done. I will do the same. I have an IRS agent looking into this. He said I may have a case. He said it may take up to 30 days for an answer. Meanwhile I am accruing a 3%/year interest charge if I fail to overule them. I feel like David vs Goliath!

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 1:20 pm
by ztanos
Valdemar wrote:LOL. No wonder claiming EV credit now flags your return.

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anyone else notice they spelled camaro wrong?

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 1:41 pm
by davewill
ztanos wrote:anyone else notice they spelled camaro wrong?
There are lots of these in the doc. I assume these spellings came right off the returns that were filed.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Wed May 02, 2012 6:20 pm
by mksE55
why I went with the lease as well., Never trusted the government to give the 7500.00 back. If it cost me alittle more at least Nissan gets it and maybe will continue to make better EV's. Hope all works out for you guys. :geek:

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Thu May 03, 2012 4:32 pm
by astrorob
haha, i just got a letter from the IRS saying they did not refund to me the entire amount that i claimed i was owed. who wants to guess that it's the EV credit? i have to check my bank account. within 3 weeks they are supposed to contact me.

edit: ha, my refund is short by less than $100. if i had to guess now i'd say that the EV credit made them take a careful look at the return and they found some random error i made.

edit edit: hmm, the refund is short almost exactly by the amount of foreign tax credit that i have. but i don't understand how that could have limited the EV credit because my regular tax is a 5-digit number. reducing that by the foreign tax credit is still a number much larger than $7500. i wonder if the IRS has gotten confused here and reduced the EV credit by the foreign tax credit.