Question for Tax Experts (Prius $2,000 deduction)

Hello CPA's and tax attorneys!

Can I buy two Prius in the same tax year and LEGALLY claim TWO $2,000 deductions? Married, filing joint return.

If you can't guess... today I was told that the Prius I'd ordered here in Michigan is going to be delivered in three weeks. That's a few weeks earlier than I'd expected.

Anyone know what a 2004 with 8,000 gentle miles on it is worth on the used market?

 

Hmmm... no tax experts on PriusChat? I'll answer it myself...

per IRS website :

http://www.irs.gov/newsroom/article/0,,id=...=104549,00.html

"The original purchaser of a qualifying hybrid gas-electric car may deduct $2,000 for the year the vehicle is first used, if that year is before 2006. In 2006, the deduction is scheduled to drop to $500.

These vehicles qualify for the clean-fuel vehicle deduction:

Toyota Prius — Model Years 2001 through 2005
Honda Insight — Model Years 2000 through 2004
Honda Civic Hybrid — Model Years 2003 and 2004

Individuals must use Form 1040, not one of the shorter forms, to claim this deduction. They should put "Clean-Fuel" and the deduction amount on the dotted line to the left of line 33, including this amount in that line's total adjustments to income. (They would have used line 34 on the 2002 Form 1040, line 32 in the previous two years.)

Qualifying individuals who did not claim the deduction when they filed may claim it on an amended return (Form 1040X). Generally, taxpayers may amend returns up to three years from the original return's due date."

I called the IRS and a Mrs. Worthington, after spending 15 minutes researching it, said there does not appear to be any limit to the number of clean fuel vehicles that you may claim the deduction for in any given tax year. So she instructed me to simply note that I put a quantity of two Clean-Fuel Vehicles into use in 2004, and to deduct $4,000.

Sweeet