Selling Clarity & $7,500 Fed Tax Credit info

[EV4Me]

Does anyone know when I can sell my 2019 Clarity if I will be claiming the $7,500 Fed Tax Credit in Jan 2021 on my 2020 tax return?
Can I sell it:
1. Can I sell it now.
2. After I file the 2020 tax return but before I actually get the $7,500 check/deposit.
3. Only after I receive the $7,500 check/deposit.

Thank you in advance

 

[DucRider]

Does anyone know when I can sell my 2019 Clarity if I will be claiming the $7,500 Fed Tax Credit in Jan 2021 on my 2020 tax return?
Can I sell it:
1. Can I sell it now.
2. After I file the 2020 tax return but before I actually get the $7,500 check/deposit.
3. Only after I receive the $7,500 check/deposit.

Thank you in advance

There is no requirement that you keep it for any specified time. Only that it was not purchased for resale.

 

[Bender]

Just read the irs instructions on the form, they're pretty simple.

The only thing you couldn't do is buy it with the intent to resell. Plenty of reasons could have you sell it when less than a year passed, without an original intent to immediately sell it.

 

[jdonalds]

Does anyone know when I can sell my 2019 Clarity if I will be claiming the $7,500 Fed Tax Credit in Jan 2021 on my 2020 tax return?
Can I sell it:
1. Can I sell it now.
2. After I file the 2020 tax return but before I actually get the $7,500 check/deposit.
3. Only after I receive the $7,500 check/deposit.

Thank you in advance

Caution. There is no $7,500 check. The $7,500 is a Tax Credit. That means if you owe $7,500 or more on your taxes for 2020 that will be reduced by $7,500. Another example is if you only owe $2,500 federal tax then your tax balance will be $0 and you will forfeit the difference of $5,000.

I assume you bought the Clarity in the January to December 2020 timeframe right? This particular tax credit does not carry forward if you can't make full use of it in the tax year you bought the car.

 

[Landshark]

You don’t have to owe $7500 in order to take advantage of the tax credit.

If your taxable income shows that you have a $15,000 federal tax liability, that liability would be reduced (credited) by $7500, making your revised tax liability $7500. Had you managed to have exactly $15,000 in federal income taxes withheld from your annual income, you would receive a refund of, $7500.

Likewise, as mentioned above, if your tax liability was $22,500, but you had only had $15,000 withheld, your liability would be reduced to $15,000 and you would owe nothing.

 

[Fast Eddie B]

With all due respect, the amount you had withheld has virtually nothing to do with the net benefit of the potential $7,500 tax credit, and just complicates the issue.

We bought our 2018 in 2018 because that year was an aberration for us - in retirement, most years we pay less than $7,500 in federal tax. But in 2018 we had sold stocks to build a hangar home and were able to take the full credit.

That said, if the gov’t was serious about spurring EV sales, they would just offer a $7,500 check. But I guess what we got was the result of a compromise, and we need to plan financially for what is actually offered.

 

[EV4Me]

Thank you for the responses, I appreciate it.
I am very familiar with the $7,500 Fed Tax Credit as this 2019 Clarity is our 3rd one in the family. It just so happens that I jumped the gun on a 2019 Touring earlier this year and the deals are much better right now. If we purchase the 2020 Touring it will be purchased under another family member and will qualify for the $7,500 Fed Tax Credit. The 2020 Touring with the 1.9% finance and lower price etc actually will cost less than the 2019 Touring so it's a no brainer.
Just trying to figure out the best time to sell the 2019 so as to not affect the $7,500 Tax credit which we should recieve by Feb 2020, which has been the case in the past.

 

[DucRider]

Just trying to figure out the best time to sell the 2019 so as to not affect the $7,500 Tax credit which we should recieve by Feb 2020, which has been the case in the past.

The date you purchased is the only thing you report to the IRS. Date of sale has no impact on qualifying for the credit.

 

[Landshark]

The intent was not to imply that withholding has an impact on the credit. Some folks seem to believe that they will receive a $7500 check from the IRS as a rebate for buying the car.

I was simply providing an example of how an individual could modify the amount of federal tax withheld from their paycheck so as to actually receive a tax refund after filing their return, which might feel like getting a check for the credit. Conversely, they could modify withholding so as to underpay approximately $7500 over the course of the year. This would allow them to pocket the $7500 over time and the $7500 underpayment on the tax return would be eliminated by the credit.

It isn’t terribly complicated, although there are a number of misconceptions, and what seems to be confusion, about the differences between a credit, a rebate and a refund.

With all due respect, the amount you had withheld has virtually nothing to do with the net benefit of the potential $7,500 tax credit, and just complicates the issue.

 

[blinkme323]

I’ve also been sniffing around the trade in market recently and the offers on the Clarity are shockingly low.

Ours is a 2018 Touring with only 6k miles and most of the offers have been in the 14-15k range. I’m hoping it is just a temporary aberration.


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[Bender]

Ours is a 2018 Touring with only 6k miles and most of the offers have been in the 14-15k range. I’m hoping it is just a temporary aberration

Have you tried the online outlets like carvana/vroom? Carvana shows 19k locally for2018 touring and 6k miles. Still down pretty far from the 23k 2 months ago.... but much better than 14-15k. Maybe you could get a dealer to match (to get the sales tax credit if applicable).

Nada auction values show a similar profile, ~2k decrease in 2 months.

 

[blinkme323]

Have you tried the online outlets like carvana/vroom? Carvana shows 19k locally for2018 touring and 6k miles. Still down pretty far from the 23k 2 months ago....

Nada auction values show a similar profile, ~2k decrease in 2 months.

Yes, Carvana and Vroom quotes were around 15.8k iirc, so maybe there is a regional adjustment.


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