Tax credit discussions

[HuntingPudel]

"conversion", not "contribution"
If you don't understand the difference, consult an enrolled agent or tax accountant. It might be worth a lot of money to you to have a full and correct understanding. Taking tax advice from unqualified Forum Posters is a risky business!!!!! A significant number of these posts are flat out wrong, misleading, or misstated.

Well, I am now pretty sure my tax burden will be more than the federal tax credit, since my mom passed away. The tax on her share of my house alone should make it so that I have to pay the government no matter how much tax credit I get.

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[engnrng]

It's definitely something for people to confirm for their situation. Fortunately, it should be pretty easy for everyone to check since it's right around tax time.

I've got an old W2 where I happened to pay almost exactly $7500 in federal income tax. My annual salary was also almost exactly what I'm paying for the Mach E now. If you're regularly employed (not in retirement, for example), and your entire annual income is the cost of the car... I'd recommend a different vehicle.

Be careful. W2 Federal tax withholding and Federal tax liability are 2 very different things and rarely match. W2 withholding is not relevant to what you can claim as the EV tax credit. What matters is your tax liability, not tax withholding.

 

[ARK]

Well, I am now pretty sure my tax burden will be more than the federal tax credit, since my mom passed away. The tax on her share of my house alone should make it so that I have to pay the government no matter how much tax credit I get.

Sorry for your loss. However, unless your mom left you a nine figure inheritance, there ordinarily wouldn’t be a tax from inheriting property from your parents that you are holding onto.

EDIT: At least as far as the feds are concerned.

 

[HuntingPudel]

Sorry for your loss. However, unless your mom left you a nine figure inheritance, there ordinarily wouldn’t be a tax from inheriting property from your parents that you are holding onto.

EDIT: At least as far as the feds are concerned.

Thanks @ARK

Well, that’s good to know. I didn’t want to be on the hook for capital gains on a multimillion dollar house. Stupid Bay Area property values.

She didn’t have much in savings, and my name was already on some of her accounts, so those won’t shift my tax liability upward.

 

[engnrng]

Thanks @ARK

Well, that’s good to know. I didn’t want to be on the hook for capital gains on a multimillion dollar house. Stupid Bay Area property values.

She didn’t have much in savings, and my name was already on some of her accounts, so those won’t shift my tax liability upward.

@ARK is correct. Typically, her portion of the house will step up in basis (her accumulated capital gains will disappear as of the date of her passing - get an estimate of the house value as of that date) and when you eventually sell (perhaps to move to a house that has more garage space...!) the capital gains will be that much less for you. And, yes, it is likely that there will be no Federal income tax on her estate, certainly no increase in tax liability for you.

 

[DYohn]

Well, I am now pretty sure my tax burden will be more than the federal tax credit, since my mom passed away. The tax on her share of my house alone should make it so that I have to pay the government no matter how much tax credit I get.

Sorry for your loss.

 

[HuntingPudel]

Sorry for your loss.

Thanks.

 

[Chrisorg]

The fact that taxes aren't reimbursable has been a problem for many companies, including mine. When we sell something, we pay taxes. And if the package is returned, we can't take the taxes back. And that is not fair. However, it is the reality. Also, it's a significant issue when it comes to employees and retired people. We had recently made up a payroll software, inspired from https://www.payrollindex.com/outsourced-payroll/, and the amount of money we wasted on taxes is incredible. And I can not believe that sometimes when people get credits, they have to pay taxes.

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