Any used LEAFs for sale yet?
- Thread starter Stunt822
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evnow
Well-known member
Where is "here" ?Stunt822 said:
tps
Well-known member
I suspect you'd have a hard time convincing the IRS the car was "not for resale" if you sold it during the tax year for which you were claiming the credit.aqn said:
evnow
Well-known member
Is that in Rairdon's ?Stunt822 said:
DaveinOlyWA
Well-known member
that was the one i referred to. that car was new
aqn said:
Why not?planet4ever said:
Again, all I know is what I read in that IRS publication (which has almost exactly the same wording as in the American Recovery and Reinvestment Act of 2009). There is nothing regarding how long you have to keep your Leaf.
Why? How long do I need to keep it to avoid that? One week? One year? Ten years?tps said:
All that said, there is indeed a "not for resale" clause: "The vehicle is acquired for use or lease by the taxpayer, and not for resale; ...". The problem is that there are no additional specifications of what that means. It'd be simple enough to include "for first purchaser's use for at least N days", but there is none. Instead, it's unspecified. Does that mean "not for resale", ever, or "not for resale" until after one year, or "not for resale" until after one day?
It's clearly ambiguous (oxymoron!). How does would the IRS prove that a Leaf was purchased "for resale"? If the purchaser is a dealer, yes, it might be easy to prove that. What if the purchaser is an individual who bought only three cars in the past thirty years?
The reason I believe that it does not matter is because (and this is strictly my opinion) the intent of the tax credit (stemming from the Recovery and Reinvestment Act) is to promote migration away from use of fossil fuel for transportation, specifically, in this case, to promote sales and use of plug-in electric vehicles. To that end, once one buys a Leaf, regardless of how long one keeps it, the Act has already achieved its goal: one more plug-in electric vehicle on the road. It does not matter how long the new owner hangs on to the vehicle. The IRS doesn't care about people taking advantage of the tax credit and "flipping" the car because as said before, nobody is gonna by an used Leaf for more than about $25K (MSRP less the tax credit) when they can buy a brand new one for about the same amount?
(Also, as noted, the only way an used Leaf might go for more than $25K is if the demand for Leaf's is so huge that people are willing to pay more than (MSRP - tax credit) for an used Leaf because they did not have a reservation. In that case, one can make a profit selling a Leaf regardless of whether one gets a tax credit in the first place. The only difference will be the amounts involved: one pays "MSRP - tax credit" and sells for "MSRP - tax credit + mark-up because of demand", versus paying MSRP and selling it for "MSRP + mark-up because of demand".)
In the end, I'm not a tax accountant or tax lawyer, so obviously, each of us must form his/her own conclusion, or better yet, seek advice of a tax accountant.
evnow
Well-known member
That is the problem. It leaves it open for interpretation. Are you going to sue IRS ? A jury will probably side with IRS if the guy sold after one day ...aqn said:
Randy
Well-known member
Lots of things in life are ambiguous, including the tax laws.
But I find usually that the differences between "right" and "wrong" are clearer.
I would only file for a LEAF federal tax credit if I bought or leased the car to keep it.
But I find usually that the differences between "right" and "wrong" are clearer.
I would only file for a LEAF federal tax credit if I bought or leased the car to keep it.
EVDRIVER
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If you sell the car in a few days does anyone thing you should forfeit the tax credit that the buyer is unable to get? So you must take a $7500 hit because the market would expect that rebate. I really doubt the IRS would care, people change their mind all the time, you drove the car and put it in service, you put it in your name and you were not a dealer holding title, once again debating senseless points the IRS won't care about, they are looking for abusers and the language is general and standard. If you own a business and take many types of tax credits you know that this is all standard BS and you can sell the car and take the credit. If you are a car broker then the story may change because you can buy without processing registration and resell, etc.
No, 'cause I have no problem with their rules the way they are written.evnow said:
I'm not convinced that the IRS will come after someone for not giving the tax credit back after 1 day0 (or 30 or 60 or 364 days) of ownership. Hopefully someone will post on here from a Federal pen and let us all know should it turn out different.
I'm addressing the question of whether or not one would have to give the tax credit back, or not claim the tax credit because one sells one's Leaf after one day/one week/six months/364 days of ownership.Randy said:
I don't really care whether that's right or wrong, because 1. that's not the point, and 2. I'm not going to sell my Leaf (not unless Nissan or somebody else comes out with a smaller/lighter EV), and 3. it's pointless buying a Leaf, taking advantage of the tax credit, and then sell it trying to make a profit, so therefore there won't be an army of IRS auditors waiting to nail those who do.
garygid
Well-known member
IF your purchase and resale were to be examined by the IRS, they would probably judge whether you had the INTENT to USE or RESELL at the time you made the purchase. My guess.
In general, I think, the IRS has a lot of "freedom" to interpret any vagueness in the rules.
In general, I think, the IRS has a lot of "freedom" to interpret any vagueness in the rules.
tps
Well-known member
I think you'd need to own it at least until the end of the tax year in which you purchased it and were claiming credit. Which, I suppose, could be one day if it was purchased on Dec 31. If you resold it during the tax year, my feeling is that the IRS would have a hard time believing you did not purchase it for resale, since clearly, it was resold. However, since they don't give a minimum length of time, I say selling it in the next tax year is OK. I'm not a tax accountant, but that seems to me a "common sense" way to interpret the words. However, in our society today, "right" seems to be whatever you can get away with, and I'm not about to bet what could be gotten away with.aqn said:
You may say, "I purchased it with the intent of not reselling but circumstances changed and I resold it." Well, in the same way of "I intended to purchase an EVSE, but they weren't available soon enough", I believe the IRS is not that interested in what you intended to do during a tax year, but more interested in what you actually did...
ENIAC
Well-known member
I was told Reeler sold his LEAF to someone in New Jersey last month.drees said:
I believe that's where we differ. I believe that the IRS is not interested in what one does with one's Leaf, period. It's not like people can take advantage of the tax credit and profit from it.tps said:
evnow
Well-known member
Why not ?aqn said:
Let us say some one buys Leaf and sells the next day for a profit of $5K. You think IRS will not think the guy bought it to resell and make a tidy profit ?
I think a person who is reselling instead of rejecting to buy (i.e. orphan the car, since he would lose nothing by doing that) would have to show some change in circumstance after buying the car that resulted in him selling it. Like in Reeler's case, it was change in his work arrangements.
aqn said:
Sigh. I have the feeling nobody read what I wrote.evnow said:
Why do you think you can make a $5K profit selling a Leaf? Who will buy an used Leaf from you for "MSRP less $7500 tax credit plus $5000 profit" when he can buy a BRAND NEW one for "MSRP - $7500"? And before anybody trot out the theory about people who have no reservations but want a Leaf anyway, please read what I wrote 'cause this thread is getting old:
aqn said:
The federal tax credit is available to the person or entity with the original use of the car. It doesn't matter whether you own it a week or a month. They are the one that gets the tax credit. If they drove it for any other purpose the moving the vehicle location or road testing prior to delivery of a customer it becomes a used vehicle. If the person buying the vehicle is really buyng it for the purpose of resale they probably already know the rules in the state they are doing busness in regarding the sale of new or used vehicles. If they don't they should find out first.
FTC definition for
It is likely that the interpretation the IRS would use is; the tax credit would reduce your basis in the vehicle. If you sell it for more that the basis you will owe capital gains tax in the sale. If you bought it for $32.5K-$7.5K(tax credit) -> $25K basis, selling it for $30K means you would owe capital gains on $5K. If you owned it less than a year you will likely pay taxes for short term capital gains. Would you make money doing this? Yes. Depending in which state the transactions take place it will impacts the registration, sales and use tax costs.
The person buying the used vehicle will not be entitlted to the fedral tax credit.
One should consult their accountant to understand exactly how it will affect them.
I think this thread has gotten off topic.
So is there any used LEAFs for sale yet?
Anybody know what they actually sold for?
FTC definition for
It is likely that the interpretation the IRS would use is; the tax credit would reduce your basis in the vehicle. If you sell it for more that the basis you will owe capital gains tax in the sale. If you bought it for $32.5K-$7.5K(tax credit) -> $25K basis, selling it for $30K means you would owe capital gains on $5K. If you owned it less than a year you will likely pay taxes for short term capital gains. Would you make money doing this? Yes. Depending in which state the transactions take place it will impacts the registration, sales and use tax costs.
The person buying the used vehicle will not be entitlted to the fedral tax credit.
One should consult their accountant to understand exactly how it will affect them.
I think this thread has gotten off topic.
So is there any used LEAFs for sale yet?
Anybody know what they actually sold for?
