Buy 2006 Prius with 3k miles. Who gets the $3,150 credit?

usbseawolf2000 · 07-26-2006, 12:27 AM

A friend of mine had a question because someone he knows is looking to buy a 06 Prius with 3k miles on it. So, it is a given that the car is used.

Will the original owner get the tax credit? I think not because I read about the min ownership in order to qualify. Can someone confirm this?

The new owner will not get tax credit also because it is a used car since only new cars can qualify for the tax credit.

So, does it mean nobody will get the tax credit? TIA.

Dennis

cwerdna · 07-26-2006, 01:52 AM

<div class='quotetop'>QUOTE(usbseawolf2000 @ Jul 25 2006, 09:27 PM) [snapback]292411[/snapback]</div>

Quote:

A friend of mine had a question because someone he knows is looking to buy a 06 Prius with 3k miles on it. So, it is a given that the car is used.
[/b]

Any why would he do that? Is he going to save $3150?

Godiva · 07-26-2006, 03:24 AM

Yep, nobody gets it.

You can't get it if you're not the original owner.

I'm not sure how long you have to own it to get the tax credit, but it sounds like it wasn't long enough.

I hope they guy that bought it used paid at least $3,100 less than a new one would have cost.

MFB · 07-26-2006, 04:08 AM

<div class='quotetop'>QUOTE(usbseawolf2000 @ Jul 25 2006, 11:27 PM) [snapback]292411[/snapback]</div>

Quote:

A friend of mine had a question because someone he knows is looking to buy a 06 Prius with 3k miles on it. So, it is a given that the car is used.

Will the original owner get the tax credit? I think not because I read about the min ownership in order to qualify. Can someone confirm this?

The new owner will not get tax credit also because it is a used car since only new cars can qualify for the tax credit.

So, does it mean nobody will get the tax credit? TIA.

Dennis
[/b]

Uncle Sam gets to keep it. That helps the rest of us.

usbseawolf2000 · 07-26-2006, 10:30 AM

Ok, thanks everyone for replying with input.

Dennis

wstander · 07-26-2006, 10:54 AM

Why wouldn't the original owner still get the credit? The time proviso is only in effect for business expensed cars, not private use vehicles.

Unless I read the IRS rules wrong, as long as the original owner took possession after 1 Jan 2006 and before the limits kicked in, the original owner still gets the tax credit.

Scott_R · 07-26-2006, 09:56 PM

<div class='quotetop'>QUOTE(usbseawolf2000 @ Jul 26 2006, 12:27 AM) [snapback]292411[/snapback]</div>

Quote:

A friend of mine had a question because someone he knows is looking to buy a 06 Prius with 3k miles on it. So, it is a given that the car is used.

Will the original owner get the tax credit? I think not because I read about the min ownership in order to qualify. Can someone confirm this?

The new owner will not get tax credit also because it is a used car since only new cars can qualify for the tax credit.

So, does it mean nobody will get the tax credit? TIA.
[/b]

I've heard that the hybrid tax law limits the tax credit if taxpayers re-sell their hybrid, but I don't know that the IRS has issued regulations to interpret this.

onerpm · 07-27-2006, 11:29 AM

I haven't read the tax credit regs, but there was a similar perception going around about the prior tax deduction that (at least IMO) turned out to be false. The regs for the deduction had some recapture requirements. If I recall them right, if you transferred the car within 3 years to someone who you knew was going to take certain actions like removing car from the U.S., or disabling the hybrid system (!), etc., then the recapture applied. It was clear on my reading that a traditional resale to someone, no matter when it took place, would not trigger the recapture requirement.
However, the tax credit rules could differ.

wstander · 07-27-2006, 11:34 AM

<div class='quotetop'>QUOTE(ScottR @ Jul 26 2006, 06:56 PM) [snapback]292926[/snapback]</div>

Quote:

I've heard that the hybrid tax law limits the tax credit if taxpayers re-sell their hybrid, but I don't know that the IRS has issued regulations to interpret this.
[/b]

Only for commercial/business use is the credit limited or recaptured.

See IRS pub 535 or do a search on hybrids on at irs.gov

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07-26-2006, 12:27 AM	#1
usbseawolf2000 HSD PhD Join Date: Sep 2004 Location: Queens, NY Posts: 1,637 My Car: 2006 Prius Package: #3 Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 47	A friend of mine had a question because someone he knows is looking to buy a 06 Prius with 3k miles on it. So, it is a given that the car is used. Will the original owner get the tax credit? I think not because I read about the min ownership in order to qualify. Can someone confirm this? The new owner will not get tax credit also because it is a used car since only new cars can qualify for the tax credit. So, does it mean nobody will get the tax credit? TIA. Dennis

07-26-2006, 03:24 AM	#3
Godiva AmeriKan Citizen Join Date: Apr 2005 Location: San Diego, CA Posts: 10,022 My Car: 2005 Prius Package: #1 Nominated 3 Times in 2 Posts TOTM Awards: 0 Friends: 6	Yep, nobody gets it. You can't get it if you're not the original owner. I'm not sure how long you have to own it to get the tax credit, but it sounds like it wasn't long enough. I hope they guy that bought it used paid at least $3,100 less than a new one would have cost.

07-26-2006, 10:30 AM	#5
usbseawolf2000 HSD PhD Join Date: Sep 2004 Location: Queens, NY Posts: 1,637 My Car: 2006 Prius Package: #3 Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 47	Ok, thanks everyone for replying with input. Dennis

07-26-2006, 10:54 AM	#6
wstander Join Date: Jul 2005 Posts: 978 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	Why wouldn't the original owner still get the credit? The time proviso is only in effect for business expensed cars, not private use vehicles. Unless I read the IRS rules wrong, as long as the original owner took possession after 1 Jan 2006 and before the limits kicked in, the original owner still gets the tax credit.

07-27-2006, 11:29 AM	#8
onerpm Senior Member Join Date: Aug 2004 Location: MN Posts: 477 My Car: Other Hybrid Package: N/A Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	I haven't read the tax credit regs, but there was a similar perception going around about the prior tax deduction that (at least IMO) turned out to be false. The regs for the deduction had some recapture requirements. If I recall them right, if you transferred the car within 3 years to someone who you knew was going to take certain actions like removing car from the U.S., or disabling the hybrid system (!), etc., then the recapture applied. It was clear on my reading that a traditional resale to someone, no matter when it took place, would not trigger the recapture requirement. However, the tax credit rules could differ.