08-16-2022, 07:20 PM | #89 | |
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Next up is whenever guidance is issued by the Secretary or until 12/31/22 whichever comes first for battery requirements to take effect (hoping it’s 12/31/22) After that 1/1/23 is when income limits, price caps, and the rest take effect unless you’re one of those who’ve put down a minimum of 5% as non-refundable deposit to make a binding contract prior to bill being signed today then you can partake in transitionary rule. |
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08-16-2022, 07:32 PM | #90 |
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I think it's important to read the whole guideline and how each section relates to one another. It seems like the IRS definition of a binding contract is at least 5% deposit or down payment. So are people with pending orders now going to call the dealership and say take more of my money as a non-refundable deposit?
Transition Rule for Vehicles Purchased before August 16, 2022 |
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08-16-2022, 07:36 PM | #91 | |
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08-16-2022, 07:37 PM | #92 | |
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08-16-2022, 07:47 PM | #93 |
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Nah. People needed to do that before Biden signed. Unless dealers do some sneaky stuff and back date the contract prior to today, which I doubt.
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08-16-2022, 08:15 PM | #94 |
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So the way I am interpreting this is that any X5 45e (all are assembled in North America) that is paid for and delivered to a customer by 12/31/2022 is eligible for the EV credit of $7,500 under the old rules. No binding contract before 8/16/2022 needed and no need to wait for Secretary guidance.
Also, no MSRP or Gross Income requirements apply. That is what TurtleBoy has been patiently repeating I think. |
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08-16-2022, 08:22 PM | #95 | |
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My fingers can now type it without me having to think about it.
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08-16-2022, 08:27 PM | #96 |
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08-16-2022, 09:25 PM | #98 |
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I highly suggest printing the current IRS guidance to pdf for your records; the IRS updates and removes such guidance without notice sometimes.
https://www.irs.gov/credits-deductions/individuals/plug-in-electric-drive-vehicle-credit-section-30d |
08-16-2022, 09:49 PM | #99 |
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If anyone needs the binding contract exemption, I would review your specific state contract law to support your position (many would not require a deposit but there would be a financial commitment). Even with the IRS “suggestions”, I don’t believe the IRS can overcome a valid contract under your states rules. Hopefully, most can get their car before 12/31.
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08-16-2022, 09:57 PM | #100 | |
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I doubt there are any like this but lets say a state says that a binding contract for a vehicle can be entered into with a minimum $50 deposit. Under IRS rules that would not be considered binding since for tax purposes the limit of damages must be at least 5% of the contract price.
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08-17-2022, 02:00 AM | #101 |
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Still confused about this. What if my car is now in transit and I have paid less than 5% of the price as deposit when I ordered it in July. Will it qualify for the tax credit or not?
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08-17-2022, 02:07 AM | #102 | |
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“Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022 If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.” Last edited by Jd19; 08-17-2022 at 02:19 AM.. |
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08-17-2022, 02:10 AM | #103 | ||
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08-17-2022, 02:18 AM | #104 |
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Each state will have different rules for what constitutes a binding contract. Regardless, you do not need a binding contract if you qualify under the other option.
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08-17-2022, 05:50 AM | #105 |
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I put $1k nonrefundable deposit at a Texas dealership on August 1st for a week 38 build.
The dealer won't budge on a binding contract prior to delivery, a non refundable contract or provide any alternatives leading up to the IRA bill signing. Then, there's the MSRP Caps of $80k for SUVs, my build came out to $82,270. Based on the IRS bulletin, it doesn't seem like I'll qualify for the tax credit. What are your thoughts? |
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08-17-2022, 06:39 AM | #106 | |
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08-17-2022, 06:50 AM | #107 |
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You will not need a binding contract since it will be delivered prior to the end of the year when the battery guidance is expected. The binding contract is only for those needing to use the Transition rule.
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08-17-2022, 06:52 AM | #108 |
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Yes but just because a contract is binding by state rules it does not mean it means the requirements of the IRS in order to take advantage of the Transition rule.
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08-17-2022, 06:53 AM | #109 | |
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08-17-2022, 07:29 AM | #110 | ||
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I emailed my dealer and asked to drop it under $80k MSRP, just in case and inquired about the deadline to get my refundable moolah back. But, let's hope Pete doesn't issue anything. Otherwise, it'll be back to a regular car for us. |
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