Federal Tax Credit and trade-ins

  • Thread starter Thread starter JaguarGabe
  • Start date Start date
  • Replies Replies 5
  • Views Views 1K
J

JaguarGabe

New Member
Has anyone been audited by IRS for trading in one electric vehicle for another after taking the tax credit per vehicle? I traded in an i-Pace for a "better" one in the same calendar year and the IRS is saying I can't take either credit, as I had used a credit a previous year for a Honda Clarity. They may come after me for the Honda Clarity credit too. I had tax liability in both years that was larger than the tax credit(s).
 
The only thing that makes sense to me is that someone else is claiming the tax credit for the same car, or the IRS doesn't have the necessary paperwork from the manufacture or dealer. We have seen others where the IRS doesn't have the paperwork from the manufacture, and it's caused problems.

Anyhow, you can take the tax credit every year if you want as long the vehicle qualifies and you have enough tax liability. So I don't know what that issue is all about. However, it wouldn't surprise me that taking the tax credit gets flagged.

You will probably need to be able to prove you owned the cars first, or if it's a manufacture issue, then good luck bird dogging it.

If you can't get this fixed on your own, then this may take a CPA who does taxes, a tax attorney, or an enrolled agent to help with this issue.
 
Last edited:
I purchased all 3 vehicles new, I was the sole owner. I've also engaged a few tax attorneys to help me respond. It doesn't make sense that they think I am "reselling" - the Clarity was to dip my toe in hybrid electric, then I wanted all electric (the iPace) then the dealer got another iPace that I fell in love with the color combination and options, then traded out. I've had the latest iPace for almost 3 years and dont plan on trading it in.
 
You must log in or register to reply here.
Back
Top