Will my SE still quality for tax credit
- Thread starter KCMOEV
- Start date
- Replies 370
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Aquavir
Active Member
Personally, I’m banking on it, but I’m not willing to bet other people’s money…
CuriousGeorge
Well-Known Member
I honestly hope you enjoy your car. Personally, though, I'm not willing to spend so much money on a vehicle, no matter how much fun it might prove to be.
teslarati97
Well-Known Member
You guys will be fine as long as you take delivery before end of the year. The whole point is that there will be an election made to IRS first (if you qualified under the transition rules) and the binding contract will substantiate your claim if audited.
The problem is there is no guidance on 2023 deliveries. Should the transition rule also apply in 2023, you would have to wait until April 2024 for your tax rebate!
The problem is there is no guidance on 2023 deliveries. Should the transition rule also apply in 2023, you would have to wait until April 2024 for your tax rebate!
polyphonic
Well-Known Member
Rivian and Nissan both offered special “tax credit contracts” to their customers, and they differ.
Nissan’s has a refundable deposit, Rivian made $100 non-refundable. So it looks like they are uncertain about the definition of “binding contract.”
Another example: https://www.vwidtalk.com/threads/just-signed-the-binding-contract-today-8-13.7342/
Nissan’s has a refundable deposit, Rivian made $100 non-refundable. So it looks like they are uncertain about the definition of “binding contract.”
Another example: https://www.vwidtalk.com/threads/just-signed-the-binding-contract-today-8-13.7342/
CuriousGeorge
Well-Known Member
You seem to be missing the point. Nobody who has pre-ordered an SE - or Rivian, or Lucid, or Fiskar, or Volkswagen - can be certain that they have a "binding contract to purchase" in the eyes of the IRS. That's why these other companies have rushed to set up ways of hopefully establishing such agreements (in the case of the first three), or have encouraged their dealers to do so (in the case of Volkswagen). Alas, MINI has simply left us all hanging.
As I said before, though, if you're willing to cover my losses I'd be happy to gamble.
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I’m certainly going to wait as long as I can for this IRS guidance, but I have my doubts that the refundable $250 deposit is sufficient consideration to render the order that I’ve placed to be a binding contract to purchase.
If this refundable $250 deposit/agreement to purchase were a binding contract to purchase, what would a breach of that contract look like? And, in that case, what might the remedies be? If the remedies were simply to restore all parties to their original circumstances, and nobody owes anyone anything, then I would argue that the original agreement didn’t bind the parties to anything or each other.
I’m hoping like hell that these order/purchase agreements count, or that some procedural sh*t happens that result in this section of the language not being enforced as literally as it’s written, but I’m short on optimism.
If this refundable $250 deposit/agreement to purchase were a binding contract to purchase, what would a breach of that contract look like? And, in that case, what might the remedies be? If the remedies were simply to restore all parties to their original circumstances, and nobody owes anyone anything, then I would argue that the original agreement didn’t bind the parties to anything or each other.
I’m hoping like hell that these order/purchase agreements count, or that some procedural sh*t happens that result in this section of the language not being enforced as literally as it’s written, but I’m short on optimism.
teslarati97
Well-Known Member
The language is still muddled, but the real benefit is being able to claim the 2022 tax credit so you can claim another credit/rebate in 2023 assuming you still qualify.
Good for Rivian/Lucid/Fiskar/VW for covering their own risk exposure. Several users with their MINI stuck at port should be taking delivery before the end of 2022. Even if you took a 2023 delivery, the binding contract would apply for the 2023 tax year using the "old rules", meaning you won't get the $7,500 tax credit until 2024.
Written binding contracts is certainly the best option for those caught under the transition. Again, the taxpayer makes the election first (no proof), and IRS may choose to audit later (to see proof). While not technically correct, MINI could add in the entire factory order timeline in the Bill of Sale.
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fishbert
Well-Known Member
Again (see comment #117), taking delivery before the end of the year is not required for the transition rule.
The placed-in-service date would still be during the 2022 taxable year (the day before enactment), so the tax credit would apply to one's 2022 taxes.
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fishbert
Well-Known Member
I think we can all agree that "written binding contract" is not well-defined as it applies to this legislation. Actual lawyers are saying this as well. So it's a bit silly to argue over it here. Everyone will have to make their own personal assessment of their comfort level to move forward with a purchase, given the uncertainty.
What I can say about my own personal comfort level is that, based on opinions from two different lawyers and my own google-fu research on contract law (lol), I feel confident that – at minimum – I would have a good argument in court that the agreements I have signed constitute a written binding contract to purchase. I doubt it will get to that point, but if it does, $7500 would be worth fighting for.
What I can say about my own personal comfort level is that, based on opinions from two different lawyers and my own google-fu research on contract law (lol), I feel confident that – at minimum – I would have a good argument in court that the agreements I have signed constitute a written binding contract to purchase. I doubt it will get to that point, but if it does, $7500 would be worth fighting for.
teslarati97
Well-Known Member
Did you see a 30D(a) amendment in the bill? The current qualified plug-in electric drive motor vehicle version reads:
(a) Allowance of credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year.
If you take delivery in 2023, you get the credit by virtue of transition rule but the taxable year will end up being 2023 and not 2022. By electing under the old rules (nobody knows how), it will be a non-refundable tax credit when you file taxes in 2024 for the 2023 taxable year.
fishbert
Well-Known Member
Yes, and I've highlighted the relevant line for you.
Under the transition rule in the pending legislation, the placed-in-service date may be set to the day before enactment, which will be during the 2022 taxable year. It doesn't matter if you take delivery in 2022, 2023, or even 2025... the taxable year will always be 2022.
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teslarati97
Well-Known Member
That could make things a mixed bag the way the bill is currently written because someone could argue their Faraday Future FF91 or Aptera order could also count for 2022. Now we have to wait to see what is the prescribed election.
polyphonic
Well-Known Member
Good to know.
So far I have a Preliminary Buyer's Order that states my VIN, MSRP, date of order, $250 deposit, stating that I will be required to execute a sales or lease contract when the vehicle arrives.
I sincerely appreciate that my local MINI dealer put this together (they have been fantastic the whole way through), but what a shame that MINI USA hasn't put a lawyer on this. I would understand if it doesn't work out in the end, but I don't understand the lack of effort. Ridiculous!
So far I have a Preliminary Buyer's Order that states my VIN, MSRP, date of order, $250 deposit, stating that I will be required to execute a sales or lease contract when the vehicle arrives.
I sincerely appreciate that my local MINI dealer put this together (they have been fantastic the whole way through), but what a shame that MINI USA hasn't put a lawyer on this. I would understand if it doesn't work out in the end, but I don't understand the lack of effort. Ridiculous!
Tommm
Well-Known Member
Mini USA? How about BMW NA? There are more BMW EVs than Mini EVs.
teslarati97
Well-Known Member
Probably still delayed with the Betriebsrätemodernisierungsgesetz German corporate governance laws.
polyphonic
Well-Known Member
Good idea! Actually take a look at post 147 here: https://bmwi.bimmerpost.com/forums/showthread.php?t=1942095&page=7
They offered a "binding" non-refundable contract.
This is just a BMW dealer, but it might help. I'm going to present it to my dealer.
They offered a "binding" non-refundable contract.
This is just a BMW dealer, but it might help. I'm going to present it to my dealer.
Aquavir
Active Member
Maybe since MINI requires all buyers to do the $250 deposit online as the first step and seems to expect their dealers to sell at MSRP they feel that they have given a fixed price (I remember reading one of the posts early in this thread suggesting that "binding" meant that the price was fixed) on the car itself (not including all the dealer add ons). Just speculating, because if they don't think their current setup will suffice and/or they haven't thought this through, it is shockingly shortsighted.