Federal Tax Credit confusion

09-22-2006, 11:36 AM

Wouldn't you know... I called IRS to ask this twice just to be sure and got two opposite answers!

What say you?

Does the hybrid tax credit kick in when you place the order (make the purshase and sign the paperwork) at the dealer or not kick in until you take delivery which pushes it into next year for most people buying now?

priaki · 09-22-2006, 11:47 AM

Delivery ... good luck

highroute · 09-22-2006, 12:31 PM

<div class='quotetop'>QUOTE(billyboy @ Sep 22 2006, 08:36 AM) [snapback]323390[/snapback]</div>

Quote:

Does the hybrid tax credit kick in when you place the order (make the purshase and sign the paperwork) at the dealer or not kick in until you take delivery which pushes it into next year for most people buying now?
[/b]

The language used by the IRS in Form 8910 (Alternative Motor Vehicle Credit) on that specific point is "purchased". But I think a vehicle purchase happens when you take title, which generally occurs upon delivery to you, not when you place a binding order.

Note: The term "placed in service" is used elsewhere, but as far as I can see it is used only with respect to the cutoff between 2005 (when there was a tax deduction) and 2006 and later (when the tax credit is in effect).

In addition, I haven't looked at the text of the law (the Energy Policy Act of 2005), but in such cases it is often not the law but the subsequent IRS regulations that establish the details. So if there is doubt it may be wise to consult a tax professional before you file your return.

Charles Suitt · 09-22-2006, 01:16 PM

<_< My research indicates that "DELIVERY" is the key - when you actually take physical possession.

linus2007 · 09-23-2006, 08:21 PM

I test drove one today and ordered one of the last 2006s. The dealer didn't know whether the Tax Credit applied to date of sale or delivery so I insisted that they mark the invoice "deposit refundable if not delivered by Sept 30th."
In my mind the dealer should know what the case is here as it means a difference of $1500. Saving $3000 on a car is a big incentive and ikt would be a strong selling point for the dealers.

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09-22-2006, 11:36 AM	#1
billyboy Guest Posts: n/a My Car: Package:	Wouldn't you know... I called IRS to ask this twice just to be sure and got two opposite answers! What say you? Does the hybrid tax credit kick in when you place the order (make the purshase and sign the paperwork) at the dealer or not kick in until you take delivery which pushes it into next year for most people buying now?

09-22-2006, 11:47 AM	#2
priaki Join Date: Sep 2006 Posts: 4 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	Delivery ... good luck

09-22-2006, 01:16 PM	#4
Charles Suitt Senior Member Join Date: Oct 2004 Location: Dallas TX Posts: 1,622 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	<_< My research indicates that "DELIVERY" is the key - when you actually take physical possession.

09-23-2006, 08:21 PM	#5
linus2007 Join Date: Sep 2006 Posts: 6 My Car: Package: Nominated 0 Times in 0 Posts TOTM Awards: 0 Friends: 0	I test drove one today and ordered one of the last 2006s. The dealer didn't know whether the Tax Credit applied to date of sale or delivery so I insisted that they mark the invoice "deposit refundable if not delivered by Sept 30th." In my mind the dealer should know what the case is here as it means a difference of $1500. Saving $3000 on a car is a big incentive and ikt would be a strong selling point for the dealers.