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

Discussion in 'Gen 2 Prius Main Forum' started by usbseawolf2000, Jul 26, 2006.

  1. usbseawolf2000

    usbseawolf2000 HSD PhD

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    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
     
    #1 usbseawolf2000, Jul 26, 2006
  2. cwerdna

    cwerdna Senior Member

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    <div class='quotetop'>QUOTE(usbseawolf2000 @ Jul 25 2006, 09:27 PM) [snapback]292411[/snapback]</div>
    Any why would he do that? Is he going to save $3150?
     
    #2 cwerdna, Jul 26, 2006
  3. Godiva

    Godiva AmeriKan Citizen

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    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.
     
    #3 Godiva, Jul 26, 2006
  4. MFB

    MFB Junior Member

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    <div class='quotetop'>QUOTE(usbseawolf2000 @ Jul 25 2006, 11:27 PM) [snapback]292411[/snapback]</div>
    Uncle Sam gets to keep it. That helps the rest of us.
     
    #4 MFB, Jul 26, 2006
  5. usbseawolf2000

    usbseawolf2000 HSD PhD

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    Ok, thanks everyone for replying with input.

    Dennis
     
    #5 usbseawolf2000, Jul 26, 2006
  6. wstander

    wstander New Member

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    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.
     
    #6 wstander, Jul 26, 2006
  7. Scott_R

    Scott_R Member

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

    onerpm New Member

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    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.
     
    #8 onerpm, Jul 27, 2006
  9. wstander

    wstander New Member

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

    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
     
    #9 wstander, Jul 27, 2006
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