2006 Tax Credit Qualifications?

<div class='quotetop'>QUOTE(ilusnforc @ May 11 2006, 06:21 PM) [snapback]253869[/snapback]</div>

The credit is federal, not state. It doesn't matter which state the car is registered in, as long as it is registered. For tax purposes, if I understand it correctly (I'm not a lawyer or an accountant), it goes by who's name is on the invoice from the dealer - have him put both. If there is any question, I think you can register/title the car with both names on it in most states - the address is simply a mailing address. For insurance purposes, be honest about what state the car is housed in. DMV only cares about an address so they can knock on your door if you are involved in a hit and run or a crime.

Parents buy cars for thier college bound kids all the time. If that kid lives out of state, it's not uncommon to register it in the state that the child is in so that the child can claim state residence at some point.

Steve

 

<div class='quotetop'>QUOTE(ilusnforc @ May 11 2006, 11:39 PM) [snapback]253969[/snapback]</div>

You need to talk to your state DMV. In Fla. the joint ownership can be with an "and" between the names, requiring both to sign if the car is sold or an "or" can be used, requiring only one signature.

 

<div class='quotetop'>QUOTE(Old Marine @ May 11 2006, 09:56 PM) [snapback]253971[/snapback]</div>

Good point... ask them at the dealership. They should be able to handle it, even if it involves faxing stuff to your mom for signatures.

 

<div class='quotetop'>QUOTE(ilusnforc @ May 12 2006, 09:59 AM) [snapback]254051[/snapback]</div>

I recommend that you also consult a tax advisor or two directly.
Her's might be right.
Most of us on this site are neither tax advisors nor tax experts.

 

<div class='quotetop'>QUOTE(ilusnforc @ May 12 2006, 10:50 AM) [snapback]254065[/snapback]</div>

According to my friend, who is a financial/tax advisor, regular folk are held to a more forgiven standard than professional tax preparers.
Having gotten this advise from H&R block, you should be covered, at the very least in regard to penalties, should the advice turn out to be incorrect.
(It wouldn't hurt to get it in writing, just in case.)

 

Let me just add one thing.
Be aware of any state tax credit implications. They can be significant.
If she intends to take a credit in Texas (I have no idea whether one exists there or not, since we don't have clients in TX), then your mom's advisors are likely correct about the vehicle being titled there to be entitled to the credit.

 

<div class='quotetop'>QUOTE(ilusnforc @ May 12 2006, 05:43 PM) [snapback]254364[/snapback]</div>

There are STATE tax credits. And it therefore WILL matter in which state the car is titled and registered if you want to get a STATE tax credit. I'm an accountant, and it is important to understand tax implications at both the state and federal level. For example, West Virginia has a state tax credit for purchase of alternative energy or hybrid vehicle.
I'm attempting to correct the misconception that there is only one credit, the federal tax credit, when in fact several states offer credits or deductions.

This link takes you to a listing of state incentives. After looking at the site, Texas section in particular, it appears that Texas doesn't offer any sort of credits, because they don't have an income tax. But, and this is an important distinction, there is a bill listed (no idea of whether it is law) that would reduce the sales/use tax on the purchase of the vehcile. It's likely that the structure of this transaction could be subject to use tax. Utah does offer an income tax credit, though.
Best plan, though is for you to check with a tax professional in both states.
As far as the IRS, they won't care who is taking the credit as long as both of you aren't taking the credit.

And doing some back of the napkin calculations, a single person has to make less than $32,000 to not take full advantage of the credit. I'm not asking you to disclose your income, but you should keep that in mind. So many new clients confuse the taxes that they may owe at the end of the year with their total tax liability, forgetting that there is withholding from their paychecks throughout the year.

 

<div class='quotetop'>QUOTE(jonlink @ May 12 2006, 09:53 AM) [snapback]254194[/snapback]</div>

Sorry, thought the poster was referring only to the federal credit.

Sounds like his moms tax advisors are referring to a business credit for leasing the vehicle and being able to have depreciation on it. That's not quite what the original intent is which is just take advantage of the $3150 while it lasts (assuming that his moms liability is sufficient enough to get it).