Anyone Else Place Last-Minute EV Orders to Lock In $7,500 Tax Credit?

[narmstrong79]

Who in here is a lawyer or tax pro who actually knows what they are talking about?

Sponsored

 

[ridgebackpilot]

Who in here is a lawyer or tax pro who actually knows what they are talking about?

Even those of us fortunate enough to be lawyers (!!) will have to wait for the IRS regulations to determine with any certainty how this will play out!

 

[Nklem]

Fisker forum has less speculation on this than we have here in just this one thread. Suggests to me that there are very few fisker orders out there from the US and explains probably why they will allocate most of their production to Europe. I highly doubt you would get a Fisker until 2024 and maybe not even 2025

If one is delivered at all. Rivian lost $1.8 Billion second quarter. Fisker already went belly up once due to a storm! It is very hard to start a car company today with the all powerful large automakers.

 

[ridgebackpilot]

If one is delivered at all. Rivian lost $1.8 Billion second quarter. Fisker already went belly up once due to a storm! It is very hard to start a car company today with the all powerful large automakers.

Tell that to Tesla! They went more than a decade without significant market penetration. The rest is history.

Most auto startups lose money at first. Rivian is delivering trucks and doesn’t seem to have any trouble raising capital. Time will tell!

 

[Nklem]

Tell that to Tesla! They went more than a decade without significant market penetration. The rest is history.

Most auto startups lose money at first. Rivian is delivering trucks and doesn’t seem to have any trouble raising capital. Time will tell!

Yes for sure. Tesla was in a unique situation being all electric cars with the infrastructure too. I had a thought the other night what if Tesla acquired Rivian. They would be the one on top….

 

[narmstrong79]

Even those of us fortunate enough to be lawyers (!) will have to wait for the IRS regulations to determine with any certainty how this will play out!

Agreed, that was kind of my point.

 

[Maquis]

Tell that to Tesla! They went more than a decade without significant market penetration. The rest is history.

Most auto startups lose money at first. Rivian is delivering trucks and doesn’t seem to have any trouble raising capital. Time will tell!

Rivian is projected to run out of money by the end of 2023. The capital markets are much less favorable now with rising interest rates. Rivian will likely survive (I hope they do), but it’s not a given.

Tesla survived because of Musk’s deep pockets at first, then from the money they received selling renewable energy credits. That bought them that decade they needed to reach the point of making money on their cars.

History is messy when you peel back the covers.

 

[SWO]

Yes for sure. Tesla was in a unique situation being all electric cars with the infrastructure too. I had a thought the other night what if Tesla acquired Rivian. They would be the one on top….

I've pondered that...it would also give Musk an out on the Cybertruck abomination (R1T and R1S replacing it) while saving face

 

[kennethjk]

Who in here is a lawyer or tax pro who actually knows what they are talking about?

Unfortunately too many variables and we have to wait for IRS regulation to be written to really determine final results, sorry. We can think based on what it says right now but doesn’t always end up that way

 

[sukhoi_584th]

There's always the potential of filing an amended 2022 tax return once the VIN is available for the form

 

[ridgebackpilot]

There's always the potential of filing an amended 2022 tax return once the VIN is available for the form

Agreed, but that would be a pain. Hopefully the IRS will amend the form to allow us to take the $7,500 tax credit in the year we actually purchase the EVs we have on order.

 

[NJ_MachE]

Agreed, but that would be a pain. Hopefully the IRS will amend the form to allow us to take the $7,500 tax credit in the year we actually purchase the EVs we have on order.

Glad you are coming around to the idea that as currently set up, you'll have to take the credit/credits in TY 2022! I should have had more faith in you.

 

[Z-one]

It will be interesting when regulations are issued (assuming they are given the IRS is backlogged with regulations).

The term written binding contract came up a few years ago around the change in depreciation rules. Now that was opposite you did not want a written binding contract before the law change.

Below is an excerpt from a tax article with those regulations. If the IRS used the same logic that would mean most of these contracts other manufacturers entered into would not be valid right now. Just another item of consideration.

Perhaps one of the most significant changes in the final regulations is that the IRS reversed its position on property subject to a written binding contract that was constructed, manufactured, or produced for the taxpayer by another person, so that it is now considered to be self-constructed, instead of being subject to the default written binding contract rules for determining the acquisition date. Because of this favorable change, third-party constructed property under a written binding contract is deemed to have been acquired on the date when physical work of a significant nature begins, including by application of the 10% safe-harbor test. This may favorably affect projects that started around the Sept. 27, 2017, date and were completed and placed in service in 2018 or later. For third-party constructed property without a written binding contract, the 2019 proposed regulations now provide that the property is deemed to have been acquired when more than 10% of the total cost of the property is paid or incurred.

Acquisition date of property

The final regulations provide additional guidance for determining the date on which a written contract becomes binding, for purposes of determining a property's acquisition date. Property acquired under a contract that was signed prior to Sept. 27, 2017, but became binding later, qualifies for 100% bonus depreciation. Under the final regulations, the acquisition date of property that a taxpayer acquires pursuant to a written binding contract is the later of:

The date on which the contract was entered into;
The date on which the contract is enforceable under state law;
If the contract has one or more cancellation periods, the date on which all cancellation periods end; or
If the contract has one or more contingency clauses, the date on which all conditions subject to those clauses are satisfied.

 

[harrism64]

I purchased my MME in March 2022. I planned on taxing advantage of the $7500 federal tax credit. The new legislation places an income cap which makes me ineligible. Does anyone know if those who purchased before this new law will be grandfathered? Thanks

 

[BadgerGreg]

Because my income is too high to qualify for the Federal tax credit under the Inflation Reduction Act, and 70 percent of EVs currently on the market likely won't qualify either, I placed a couple of written, binding purchase orders this weekend.

Probably a good idea to lock in orders now, as there are too many disqualifying conditions with the new EV tax credit. We knew this party would only last so long.

Although the new bill isn't perfect, I hope it puts more EVs into mainstream use and helps to expand the production of affordable models. Let's just hope the charging infrastructure $$ is spent SOON so the charging network is expanded quickly. There's no better anti-EV propaganda than news articles of full or broken fast charging stations.

Sponsored