Flipping Primes for Tax Credits

i haven't done it, or read about anything going wrong. idk if the deals are good enough to do it anymore.

 

If you have time and patience, the dealers want you to "come in" so they can assess the value.
I have heard this taking about an hour....may end up longer.

Carvonka can be appraised after typing in VIN and a few details....all thru your keyboard (or phone)

Only issue now is if you are looking for a 2022 Prime (21s are pretty much all-e-all) and the discounts offered.
last I checked $1500 cb. this is seriously lower than the $5500 many got in the last few months on the 21s

Second, would have to get a feeler as to what dealerships have what inventory, and where you are looking to purchase.

This is just a guess, but since most cars are in demand, and there is smaller numbers on lots,
the Primes might be even harder to find. And dealers may be tougher to work with haggle'n

 

@Salamander_King can provide more details. I think maybe you read some of the postings

I do not think it was intentional, but if done at the right time, can break even. Yes, with resetting your car to new.

With all things changed in the world, not sure on Toyotas stance on future cash back and other offers.

I am somewhat keeping a sideline approach as I have my Prius c that I would love to keep for my daughter,
but at the same time it would be nice to upgrade since the value has went up 50% in the last two years. $8k to over $11k
Would grab another Prime in an instant. But also Gen 5 or what the future holds.....hmmmm

 

Just keep reading the thread on the tax code. The law may change for the tax year 2022 such that you may or may not benefit from swapping a car. Also, if you took any CA state incentive, my understanding is that you will have to return the portion of the rebate to the state if you don' keep the car for at least 3 years. Even with no change in the current IRS code, Toyota may run out of tax credit, although from the number of sales this year, it may not happen during 2022. And finally, there is a clause in the current IRS code that allows the IRS to recapture the previously dispursed tax credit, meaning they have the power to ask for the return of the tax credit already paid.

Read more in this thread: Will IRS recapture the tax credit for alternative-fuel vehicles sold early? | PriusChat

 

I am not a tax expert, but I’ve flipped some Primes for a couple years. The market hasn’t seemed to price in the rebates when pricing used vehicles.

Maybe this is common knowledge, but I thought I’d share what I’ve learned looking through IRS regs.

I think flipping Primes is fine if you’re not immediately reselling. BUT if you sell a vehicle for profit, you need to declare a capital gain. And if you own the car for less than a year, that’s a short term capital gain.

The tax credit comes into play because it reduces your cost basis for the car.

So, if you bought a Prime this year for $24,502 and now sell it for $28,000, you need to pay short term capital gains tax on $8,000 (because your cost basis is $20,000 after the rebate.

Maybe common knowledge, but was important for me to learn so I wanted to share.