[TurtleBoy]

Originally Posted by Desh

It's fully loaded otherwise with the exception of rear heated, harman kardon, and wireless. I don't care about the wireless as there are likely good aftermarket options. The missing heated rear seats I can live with. Upgraded audio is the only feature I will definitely miss as I listen critically, but I am hoping I can get some good aftermarket speakers and likely good audio processors as well for an upgrade it if necessary.

There are a number of aftermarket solutions so you should be fine.

[Crusje]

Originally Posted by Henry2020

I find it a bit shocking that people below the income cap limit are willing to pay MSRP for the 45e.

Yeah, it's kind of crazy. They're super popular here and the only way to get them are cancelled pickups for orders. I bought mine 2 weeks ago because we are well above the income cap for next year and thought it was still too expensive. Dealer had 11 listed on the site but they were all accounted for except for 1 car that someone declined. I put a deposit and they even accepted a 2nd deposit in case I didn't want it. The other dealer had 10 but everything accounted for also. All for MSRP. Unbelievable.

[Desh]

Originally Posted by Desh

This is good news.

What if the contract was signed in December 2022 and delivery sometime in early 2023? Do the MSRP and income limits apply in that scenario?

I custom ordered with a total MSRP (including destination) of $79,845 and had to let go of the Harman Kardon audio system and the rear heated seats (swapped climate control with 4 zone and heated front seats steering and armrests) to keep it below $80k. If the MSRP does not apply for a 2022 order delivered in 2023 then I would like to modify my order to include the additional options.

It appears that the definition of MSRP for the federal tax credit excludes the destination fee. I was able to modify my order to include the Harmon Kardon system now for a as-built MSRP of $79,725 + $995 destination = Total MSRP of $80,720.

[TurtleBoy]

Originally Posted by Desh

It appears that the definition of MSRP for the federal tax credit excludes the destination fee. I was able to modify my order to include the Harmon Kardon system now for a as-built MSRP of $79,725 + $995 destination = Total MSRP of $80,720.

Glad you were able to add it and still be under.

[Desh]

Here's a link to the IRS guidance for credits for clean vehicles purchased in 2023

https://www.irs.gov/credits-deductio...-2023-or-after

The above linked IRS page has all the info and also cross links to vehicle indexes (also shared on the previous page of this thread).

[Desh]

Does anyone have a more diligent insight into what happens with custom orders with fully executed purchase contracts between 1/1/2023 and March when the battery guidance is released, but the delivery happens after the battery guidance is released?

Isn't this a similar scenario as that on 8/16/2022?

[TurtleBoy]

Originally Posted by Desh

Does anyone have a more diligent insight into what happens with custom orders with fully executed purchase contracts between 1/1/2023 and March when the battery guidance is released, but the delivery happens after the battery guidance is released?

Isn't this a similar scenario as that on 8/16/2022?

No, not similar at all. The Transition rule only applied to vehicles ordered prior to the signing that had a binding contract that met the requirements. As stated the other day when you asked, a purchase contract has no meaning in regards to the credit. The vehicle needs to be purchased and put into service while the vehicle qualifies in order to get the credit.

[Desh]

Originally Posted by TurtleBoy

No, not similar at all. The Transition rule only applied to vehicles ordered prior to the signing that had a binding contract that met the requirements. As stated the other day when you asked, a purchase contract has no meaning in regards to the credit. The vehicle needs to be purchased and put into service while the vehicle qualifies in order to get the credit.

I understand and most material I have seen from IRS has the 'in service by the proposed guidance issue date' language, but it is also true that it is simply a proposed guidance that is then subsequently open to questions and comments from the manufacturers, and they specifically make a distinction between the proposed guidelines vs. the Final rules.

For ex. look at this whitepaper released by the treasury.

https://home.treasury.gov/system/fil...hite-Paper.pdf

Further to the distinction the IRS and Treasury makes between proposed and final rules in the summary section and the end of the paper, first paragraph on page 4 also discusses the Treasury and IRS anticipate proposing a transition rule over 2023 (from the point they expressly propose the guidelines) and 2024 for determining compliance with the battery sourcing requirements

While it seems to be clear that vehicles put in service prior to their express proposal of battery sourcing guidelines in March 2023 will qualify for the tax as long as the rest of the criteria is met, they are (or at least the Treasury white paper that I cited) is not specifically clear on the possibility of a potential transition rule for vehicles purchased under a binding contract prior to the express proposal in March 2023 but put in service until after...

[TurtleBoy]

Originally Posted by Desh

I understand and most material I have seen from IRS has the 'in service by the proposed guidance issue date' language, but it is also true that it is simply a proposed guidance that is then subsequently open to questions and comments from the manufacturers, and they specifically make a distinction between the proposed guidelines vs. the Final rules.

For ex. look at this whitepaper released by the treasury.

https://home.treasury.gov/system/fil...hite-Paper.pdf

Further to the distinction the IRS and Treasury makes between proposed and final rules in the summary section and the end of the paper, first paragraph on page 4 also discusses the Treasury and IRS anticipate proposing a transition rule over 2023 (from the point they expressly propose the guidelines) and 2024 for determining compliance with the battery sourcing requirements

While it seems to be clear that vehicles put in service prior to their express proposal of battery sourcing guidelines in March 2023 will qualify for the tax as long as the rest of the criteria is met, they are (or at least the Treasury white paper that I cited) is not specifically clear on the possibility of a potential transition rule for vehicles purchased under a binding contract prior to the express proposal in March 2023 but put in service until after...

That white paper has no bearing on it, the law is very clear about it. Not only that, the IRS has made it very clear that vehicles ordered prior to the guidance but delivered after must meet the requirements. They say it twice in the fact sheet the issued, including a specific question on it.








https://www.irs.gov/pub/taxpros/fs-2022-42.pdf

[Desh]

BTW, any credible references to possible date(s)/week(s) in March when IRS and Treasury are expected to expressly propose a battery sourcing guidance?

If not, then early or late March?

[TurtleBoy]

Originally Posted by Desh

BTW, any credible references to possible date(s)/week(s) in March when IRS and Treasury are expected to expressly propose a battery sourcing guidance?

If not, then early or late March?

I think most anticipate them to release the guidance the last day of March. This way there would be a clean break with vehicles placed into service April 1st or later being under the new requirements.

[Phasers]

Originally Posted by CarFan78

So the income caps will still start on January 1? It's a bummer as we are just above the income limits for the federal tax credit.

Bit late to reply here, but if you are just above the income limits, can you up 401k/IRA contributions, or take some short term capital gains losses, or write off something to get you under the $300k AGI limit for 2023?

[Henry2020]

Originally Posted by Phasers

Bit late to reply here, but if you are just above the income limits, can you up 401k/IRA contributions, or take some short term capital gains losses, or write off something to get you under the $300k AGI limit for 2023?

Yes you can but note that not every deduction will reduce your AGI. I believe 401K and HSA will, IRA should not since you are above the salary cap. I don’t think that capital losses reduce AGI. Obviously best to double check everything with your CPA.

[TurtleBoy]

Originally Posted by Henry2020

Yes you can but note that not every deduction will reduce your AGI. I believe 401K and HSA will, IRA should not since you are above the salary cap. I don’t think that capital losses reduce AGI. Obviously best to double check everything with your CPA.

For accuracy, the number that is used for the limit for credit is not AGI but rather modified adjusted gross income (MAGI). For the EV credit, MAGI is calculated as follows:

[Crusje]

Originally Posted by Phasers

Bit late to reply here, but if you are just above the income limits, can you up 401k/IRA contributions, or take some short term capital gains losses, or write off something to get you under the $300k AGI limit for 2023?

If you're above the income limits you should have been maxing your retirement contributions anyway. No offense. Easy 45k decrease for a married couple this year.

[Phasers]

Originally Posted by Crusje

If you're above the income limits you should have been maxing your retirement contributions anyway. No offense. Easy 45k decrease for a married couple this year.

I fully agree with you, I was just trying to help OP.

[Phasers]

Originally Posted by Henry2020

Yes you can but note that not every deduction will reduce your AGI. I believe 401K and HSA will, IRA should not since you are above the salary cap. I don’t think that capital losses reduce AGI. Obviously best to double check everything with your CPA.

I think $3,000 of capital losses is the limit... not a CPA though.

More importantly, capital losses can be used to offset capital gains which add to AGI.

[Henry2020]

Originally Posted by Phasers

I think $3,000 of capital losses is the limit... not a CPA though.

More importantly, capital losses can be used to offset capital gains which add to AGI.

Sorry I think you’re right. I just looked at the form. It’s been 11 years since I took the income tax class in college lol

[S68 X5MC]

So I got my 45e last October and had it custom built with an MSRP of 84k... From what I'm seeing is that I'm screwed? WTF!!!

[TurtleBoy]

Originally Posted by TheMadVeteran

So I got my 45e last October and had it custom built with an MSRP of 84k... From what I'm seeing is that I'm screwed? WTF!!!

No, you are fine. The MSRP limits didn't go into effect until 1/1/23.