Dealer screwed me over for my 2018 $7500 tax credit.

[Valente]

Back in Feb 2018 I posted a problem I was having with UNOCARS Honda in Indio, CA where I purchased my car. I just had my taxes done for 2018 and I owe IRS $12,000 this year. Unfortunately, I cannot use the $7500 tax credit. I purchased my Honda on Jan 1, 2018 and the liars at the dealership said they were gonna create 2 contracts...one dated Dec 31, 2017 (to pad their year end inventory) and one for Jan 1, 2018 so I could take advantage of the $7500 tax credit. They said the 2017 contract would in no way affect my 2018 contract. Unfortunately, I trusted them. When my registration arrived in Feb last year it stated I purchased the car on 12/31/2017. I tried to get this changed but the dealership would not budge. I even went to DMV to try and get it changed and they said they have to go by what the dealer submits even though I showed the DMV my 2018 contract. I even tried suing them in small claims court and the judge blamed ME for signing the 2017 contract. WTF? NEVER TRUST CAR DEALERS! They are the WORST! So I am out $7500 which I am legally entitled to. Unfortunately, I can't submit it because the IRS goes by the VIN number which shows I purchased it in 2017. STAY AWAY from UNOCARS Honda. Liars and con artists. Aren't they all? Anyone have any ideas? Are there any lawyers out there?

 

[sandpiper74]

Assuming you had sufficient tax liability in 2017, I would amend your 2017 taxes to claim the credit.

 

[Mithil]

Back in Feb 2018 I posted a problem I was having with UNOCARS Honda in Indio, CA where I purchased my car. I just had my taxes done for 2018 and I owe IRS $12,000 this year. Unfortunately, I cannot use the $7500 tax credit. I purchased my Honda on Jan 1, 2018 and the liars at the dealership said they were gonna create 2 contracts...one dated Dec 31, 2017 (to pad their year end inventory) and one for Jan 1, 2018 so I could take advantage of the $7500 tax credit. They said the 2017 contract would in no way affect my 2018 contract. Unfortunately, I trusted them. When my registration arrived in Feb last year it stated I purchased the car on 12/31/2017. I tried to get this changed but the dealership would not budge. I even went to DMV to try and get it changed and they said they have to go by what the dealer submits even though I showed the DMV my 2018 contract. I even tried suing them in small claims court and the judge blamed ME for signing the 2017 contract. WTF? NEVER TRUST CAR DEALERS! They are the WORST! So I am out $7500 which I am legally entitled to. Unfortunately, I can't submit it because the IRS goes by the VIN number which shows I purchased it in 2017. STAY AWAY from UNOCARS Honda. Liars and con artists. Aren't they all? Anyone have any ideas? Are there any lawyers out there?

Any reason you can’t amend your 2017 taxes and get the credit?


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[Valente]

Any reason you can’t amend your 2017 taxes and get the credit?


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No. I cannot amend my taxes for 2017 because I purchased a lot of equipment for my business. I owed IRS nothing for 2017. I knew ahead of time I would owe something for 2018 that's why I specifically purchased the car 2018.

 

[jdonalds]

I've heard of this before. I'd speak to a lawyer to see if what the dealership did was illegal.

 

[Sandroad]

A agree with @jdonalds . If you have 2 contracts signed by dealer management for the same car, but with different purchase dates, that seem like a big red flag for legality. Did you use an attorney for the small claims court attempt?

 

[Thomas Mitchell]

And this did not sound fishy to you at the time? What was your incentive for going along with this in the first place? Did you sign 2 contracts and have copies of both? I’m not certain a Judge would be sympathetic as you may appear to be a willing participant in a fraudulent act.


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[bfd]

Very expensive lesson; seemingly unfair. Sorry it turned out this way for you.

I'd still talk with an attorney - your small-claims decision notwithstanding. $7500 is a chunk of change.

 

[MPower]

No. I cannot amend my taxes for 2017 because I purchased a lot of equipment for my business. I owed IRS nothing for 2017. I knew ahead of time I would owe something for 2018 that's why I specifically purchased the car 2018.

Why not amend your 2017 tax return to depreciate the business equipment instead of expensing it to increase your tax liability for 2017. Then take the tax credit in 2017. It will take you longer to get your money back (the depreciation life of the equipment, but at least you will get it. Something is better than nothing.

I had to do that when I bought my 2012 Prius Plugin because otherwise I did not have enough tax liability that year to let me take the full credit.

Maybe talk to an accountant (which I am not).

 

[Dante]

A agree with @jdonalds . If you have 2 contracts signed by dealer management for the same car, but with different purchase dates, that seem like a big red flag for legality. Did you use an attorney for the small claims court attempt?

I was wondering the same thing - how do you go to a judge and explain how "dealer and I agreed on 2 contracts so we can both fleece IRS"
YOu're lucky the judge didn't slap both of you with some fines.

 

[Valente]

Why would I help a car dealer pad their sales? I hate car dealers! I was told the 2017 contract would in no way affect my 2018 contract. Stupid me trusted the dealer. It was always my understanding that if there are 2 contracts, the 2nd contract with the latest date always takes precedence over earlier contracts. The judge should've known this. I got a lousy stupid judge.

 

[4sallypat]

If you have a business, why did you not lease the car which gets you a better tax deduction (monthly lease payment + tax/reg + miles deduction) ?

My Clarity was a lease to take advantage of the $7600 Honda incentive that I could take IMMEDIATELY and not hassle with a finance / cash purchase where you have to wait till the beginning of the next year to take the $7500 tax incentive.

For my lease, I was about to sign the contract on 12/30/18, but I decided to wait till 1/1/19 because the local utility increased their rebate check from $450 in 2018 to $1000 for 2019.

For me, waiting 2 days to pickup the car netted me $550 extra and NOT have to deal with the IRS tax deduction at the end of the year....

 

[Valente]

Leasing was not an option. I drive 25,000 mi a year. After a 2 or 3 year lease I would owe a ton of money for excess mileage.

 

[4sallypat]

I knew this as well but signed up for the 12K miles per year contract but I drive more than that.

I am going to buy out the lease at the end of 3 years.

Low residual value at $14K makes it a steal to buy and own at the end of the lease.

 

[DapperDano]

I knew this as well but signed up for the 12K miles per year contract but I drive more than that.

I am going to buy out the lease at the end of 3 years.

Low residual value at $14K makes it a steal to buy and own at the end of the lease.

This is my plan as well. I wanted to lease to make sure there wouldn’t be any question to getting the fed tax credit.

 

[JustAnotherPoorDriver]

Why would I help a car dealer pad their sales? I hate car dealers! I was told the 2017 contract would in no way affect my 2018 contract. Stupid me trusted the dealer. It was always my understanding that if there are 2 contracts, the 2nd contract with the latest date always takes precedence over earlier contracts. The judge should've known this. I got a lousy stupid judge.

Which contracts survives depends on what the contracts are for. if I have a contract for you to mow my lawn next summer and then we have a subsequent contract the subsequent contract will survive of the theory that we revised our arrangement before we executed the contract. On the other hand in this case the contract was to sell you a specifics car (identified by VIN). By the time the second contract is in effect on January 1st the dealership doesn't own the car anymore because there's a contract that said they sold you the car on December 31st. Therefore the second is void. Never ever agree to truly questionable business practices, but if you have to, do it only with people you trust, not with car dealers. That way, they will make you whole without being forced, because the law often feels no obligation to help coconspirators.

The judge was right. You cooperated with a fraud and he didn't feel like fixing the mess that this created .

 

[Clarity 4 life]

Leasing was not an option. I drive 25,000 mi a year. After a 2 or 3 year lease I would owe a ton of money for excess mileage.

I leased with 10k miles per year.
(Minimum miles available)
In 4 months, already have 9k miles.
Guaranteed tax credit discount.
$300 monthly payments.
Business deduction for miles driven.
(About $25k annual tax deduction)
Basically a free car after 2 years.
$15,700 purchase option .
$11,700 total payments.
$27,400 total cost plus 7% tax on $15,700

If the car is totalled in an accident, you have paid much less for the car up to that point on a lease. Insurance usually pay off the remaining payments.

 

[4sallypat]

........
.....
Guaranteed tax credit discount.
$300 monthly payments.
Business deduction for miles driven.
(About $25k annual tax deduction)
Basically a free car after 2 years.
................
If the car is totalled in an accident, you have paid much less for the car up to that point on a lease. Insurance usually pay off the remaining payments.

^^^^
yes, these are the primary reasons why I leased the Clarity.
Lease advantages:
Yes, if it is totalled or stolen, the lease contract includes GAP insurance so you are not left owing if the car is upside down in value.
In case the car is a lemon or problematic I have the option to return it and not be stuck if I had financed it.
If the car is good to me, then I will buy it out since the expensive battery factory warranty in CA is 10 years or 150,000 miles...
Residual value of the car after 3 years was 41% so that means a very low amount owed at the end making it easy to buy it out....

 

[Krippo]

Back in Feb 2018 I posted a problem I was having with UNOCARS Honda in Indio, CA where I purchased my car. I just had my taxes done for 2018 and I owe IRS $12,000 this year. Unfortunately, I cannot use the $7500 tax credit. I purchased my Honda on Jan 1, 2018 and the liars at the dealership said they were gonna create 2 contracts...one dated Dec 31, 2017 (to pad their year end inventory) and one for Jan 1, 2018 so I could take advantage of the $7500 tax credit. They said the 2017 contract would in no way affect my 2018 contract. Unfortunately, I trusted them. When my registration arrived in Feb last year it stated I purchased the car on 12/31/2017. I tried to get this changed but the dealership would not budge. I even went to DMV to try and get it changed and they said they have to go by what the dealer submits even though I showed the DMV my 2018 contract. I even tried suing them in small claims court and the judge blamed ME for signing the 2017 contract. Best tax consultant near me url Your Books On Time. WTF? NEVER TRUST CAR DEALERS! They are the WORST! So I am out $7500 which I am legally entitled to. Unfortunately, I can't submit it because the IRS goes by the VIN number which shows I purchased it in 2017. STAY AWAY from UNOCARS Honda. Liars and con artists. Aren't they all? Anyone have any ideas? Are there any lawyers out there?

how did you solve the issue?

 

[Valente]

The issue was solved because a very wise member on this forum ( I forgot who it was) told me that per the IRS, the tax credit does not take effect on the date it was purchased but on the date it was delivered. My stupid accountant should've known this. The dealer claims I purchased the car on Dec 31st 2017 which is a lie. I purchased the car on Jan 1, 2018 and took delivery of the car on that same date which means I was able to claim the $7500 tax credit. This really makes sense. If you put down a deposit in December 2019 to purchase a Tesla but don't take delivery until January 2020 then the tax credit is good for year 2020.