[Bill Tatun]

I've done some research on what constitutes a binding contract since I have ordered an Ultra with only a $250 deposit. Over the years I have had to research property deeds and seen the term "for the consideration of one dollar". This was done to satisfy one of the elements that makes a contract binding, namely that both parties receive consideration. There appears to be no limit on the amount. In fact, the term "for the consideration of one dollar" has largely been replaced by the term "good and sufficient consideration the receipt of which is hereby acknowledged" and doesn't even mention an amount. There are other elements to a binding contract, but this seems to be the source causing the most confusion.

In short, I'm taking the credit. I'll put it away somewhere in case the IRS ever comes after me so I can pay up quickly. However, I'll feel pretty good about hiring a lawyer to argue the point (as long as it doesn't cost more than $7,500).

What a [email protected]%#$!

Disclaimer: I am not a lawyer but I did stay at a Holiday Inn Express last night.

I feel pretty good about the qualification of my ONE order. My Ultra order may never see the light of day. That being said, having the $7.5K available quickly should they deny your credit is only part of the equation. The penalties and interest can add up! Not that I don’t think it qualifies, but just a thought.

 

[Jay]

I am guessing some of this info has been posted already. And this is really for US forum members. And I'm going to ask a weasel-like question (Europeans, think 'pine marten'), so forgive all of that. And I think someone on here previously accused me of trying being a tax cheat. I forgive you.

1. Anyway, good article from 2/01 in the New York Times about the US Inflation Reduction Act refunds/credits available.
2. Sure, EVs are one category of refund available & we know that the pre-legislation reservations are in limbo...even the One Orders, though I'm holding out hope.
3. But there's another category of refund under Residential Improvements and Clean Energy Credits that discusses installing battery storage technology. IRS's FAQ is here. The only requirement listed is 3 kWh or greater capacity. The credit is 30% of the cost, with no limit.

So, for any One or Extreme buyer, who has a primary residence & will wire it up with a bi-directional charger for V2H...what do you think about claiming 30% of the cost of the car? At first and second glances, it's an asinine question, but give it a 3rd glance. Still a bit silly, but I'd like a serious opinion.

Thanks.

 

[SeaPhil4]

You are a tax cheat😜

Seriously, actually, its a really good question and it certainly carries a lot more value than just the $7500 tax credit.

anyone else on here with accounting bona fides?

 

[onevoice]

I am guessing some of this info has been posted already. And this is really for US forum members. And I'm going to ask a weasel-like question (Europeans, think 'pine marten'), so forgive all of that. And I think someone on here previously accused me of trying being a tax cheat. I forgive you.

1. Anyway, good article from 2/01 in the New York Times about the US Inflation Reduction Act refunds/credits available.
2. Sure, EVs are one category of refund available & we know that the pre-legislation reservations are in limbo...even the One Orders, though I'm holding out hope.
3. But there's another category of refund under Residential Improvements and Clean Energy Credits that discusses installing battery storage technology. IRS's FAQ is here. The only requirement listed is 3 kWh or greater capacity. The credit is 30% of the cost, with no limit.

So, for any One or Extreme buyer, who has a primary residence & will wire it up with a bi-directional charger for V2H...what do you think about claiming 30% of the cost of the car? At first and second glances, it's an asinine question, but give it a 3rd glance. Still a bit silly, but I'd like a serious opinion.

Thanks.

Thanks for pointing this out, Jay! I don't have any professional accounting education, but I think you pointed out a great way to get 30% tax credit for the purchase of any EV that has the V2H functionality. According to the FAQ you referenced, any battery storage technology with at least 3KWH of capacity would qualify:

Q2. What energy efficiency requirements must be met to qualify for the Residential Clean Energy Property Credit? (added December 22, 2022) ​

​

A2. The following energy efficiency requirements must be met to qualify for the Residential Clean Energy Property Credit:​

• Solar water heating property: must be certified for performance by the non-profit Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed.
• Geothermal heat pump property: must meet the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made.
• Battery storage technology property: must have a capacity of 3 kilowatt-hours or greater.

Also the icing on the cake is that any unused tax credit for a given tax year can be carried forward into the following tax filing years so that all of the maximum of the 30% of the cost of the "Battery storage technology property" (which would include the bi-directional charging system) can be claimed. For most people, it would be difficult to use all 30% of tax credit in any given years, so it is great that all 30% of the property cost can be claimed over several years! 30% of the value of the car and the bi-directional charging system is certainly a whole lot more valuable than the uncertain $7500 tax credit.

Q4. May a taxpayer carry forward unused credits to another tax year? (added December 22, 2022)​

• Under the Residential Clean Energy Property Credit: a taxpayer may carry forward the unused amount of the credit to reduce tax liability in future tax years.

 

[Jay]

Yeah, it's sort of a dumb question but one I felt was worth asking. I think any sane accountant would say you could maybe take that specific tax credit on the bi-directional charger, but not the whole car. But the language I've seen leaves the question open. And I'm not sure where you can and can't double dip on EV credits.

 

[Bill Tatun]

Yeah, it's sort of a dumb question but one I felt was worth asking. I think any sane accountant would say you could maybe take that specific tax credit on the bi-directional charger, but not the whole car. But the language I've seen leaves the question open. And I'm not sure where you can and can't double dip on EV credits.

The 30% for the charger is only up to $1000

 

[SeaPhil4]

The 30% for the charger is only up to $1000

$1000 credit, or $1000 max value of charger unit?

 

[Bill Tatun]

$1000 credit, or $1000 max value of charger unit?

30% of total cost (install, unit, etc) up to $1000 credit.

https://www.irs.gov/pub/irs-pdf/i8911.pdf

 

[onevoice]

30% of total cost (install, unit, etc) up to $1000 credit.

https://www.irs.gov/pub/irs-pdf/i8911.pdf

According to the latest form 8911, this credit expired in 2021:

The alternative fuel vehicle refueling property credit expired for refueling property placed in service after 2021. Do not report refueling property placed in service after 2021 on Form 8911 unless the credit is extended.

 

[Bill Tatun]

According to the latest form 8911, this credit expired in 2021:

Extended to 2032 by the IRA

https://www.kiplinger.com/taxes/605201/federal-tax-credit-for-electric-vehicle-chargers

 

[onevoice]

Extended to 2032 by the IRA

https://www.kiplinger.com/taxes/605201/federal-tax-credit-for-electric-vehicle-chargers

Thank you for that, Bill Tatun, I'm getting whiplash from all the changes in the EV tax information.

 

[SeaPhil4]

Thank you for that, Bill Tatun, I'm getting whiplash from all the changes in the EV tax information.

I’m thinking my H&R Block tax prepper i’ve used to file the past 5 years just might be out of their element this year…

 

[TESLAMIZE]

Taxes are prepped - we all just waiting for VINS still? Anyone decide to file and amend later?

 

[Bill Tatun]

Taxes are prepped - we all just waiting for VINS still? Anyone decide to file and amend later?

Yes, likely, as you must complete the sale (take possession and title) the vehicle to take the credit. If not received by filing (deadline), amendment will be the route. BUT - a tax advisor or your own research (not a discussion board) would be prudent.

 

[TESLAMIZE]

Yes, likely, as you must complete the sale (take possession and title) the vehicle to take the credit. If not received by filing (deadline), amendment will be the route. BUT - a tax advisor or your own research (not a discussion board) would be prudent.

Of course. I just wanted to get a sense of what others were doing currently. I dont think Ill get the car by April 15th - or its going to be extremely close.

 

[Bill Tatun]

Of course. I just wanted to get a sense of what others were doing currently. I dont think Ill get the car by April 15th - or its going to be extremely close.

Almost the same. Expecting my ONE after 4/15. I will be filing then amending.

 

[nauchance]

Taxes are prepped - we all just waiting for VINS still? Anyone decide to file and amend later?

I filed already and will amend. I will only gain about $3600 of the available $7500.

 

[bufkey]

The i8936 draft is now official on IRS website with transition rule: Instructions for Form 8936 (01/2023) | Internal Revenue Service

 

[TT97]

The i8936 draft is now official on IRS website with transition rule: Instructions for Form 8936 (01/2023) | Internal Revenue Service

That is very promising.

Line 3​

Enter 08/15/2022 if you qualify and elect to apply the transition rule discussed below.​

​

Transition rule. ​

If you purchased, or entered into a written binding contract to purchase, a qualified plug-in electric drive motor vehicle after 2021 and before August 16, 2022, you may elect to treat such vehicle as having been placed in service on August 15, 2022, the day before the enactment date of the Inflation Reduction Act of 2022.​

No reference to delivery prior to December 31, 2022 and no language defining a "written binding contract". Of course, I am sure there will still be a lot of debate on what a binding contract will be. I am planning on amending my 2022 return as soon as I have physical possession of my car.

 

[onevoice]

That is very promising.

Line 3​

Enter 08/15/2022 if you qualify and elect to apply the transition rule discussed below.​

​

Transition rule. ​

If you purchased, or entered into a written binding contract to purchase, a qualified plug-in electric drive motor vehicle after 2021 and before August 16, 2022, you may elect to treat such vehicle as having been placed in service on August 15, 2022, the day before the enactment date of the Inflation Reduction Act of 2022.​

No reference to delivery prior to December 31, 2022 and no language defining a "written binding contract". Of course, I am sure there will still be a lot of debate on what a binding contract will be. I am planning on amending my 2022 return as soon as I have physical possession of my car.

Yes, I agree, finally it is clear cut and not ambiguous as it was before. It was great that they didn't try to narrow the definition of the binding contract. So I'll amend my 2022 return as well.