Will my SE still quality for tax credit

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Aquavir said:
I feel good about my PO then. It clearly states that I have to buy the car unless I’m seeking financing from them and it falls through, which I’m not doing.
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I’m in the same position, but I’m not as confident because of this statement.
“A contract is binding even if subject to a condition, as long as the condition is not within the control of either party.”
 
Phive_Phinger_Dan() said:
I’m in the same position, but I’m not as confident because of this statement.
“A contract is binding even if subject to a condition, as long as the condition is not within the control of either party.”
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As I said in a recent comment on the last page, the IRS appears to be describing what will make them happy, not necessarily what the limits of the law are. There's gray area in between, and that's where one might be at risk of having to defend the claiming of the credit in court (if it ever gets that far). Everyone sitting in that gray area needs to make their own assessment as to whether that's a comfortable place for them to be, but if someone feels like they're being forced into cancelling an order, I'd certainly recommend a consultation with a tax attorney first.
 
All I can say is---I'm glad I got mine when I did. I was able to get the Sig model (my preferred trim level), and the tax credit.

So little clarity on the rules now, and the crop of US-assembled EV's available in 2022 is so....unappealing. Sorry to see this much uncertainty for new purchasers. I don't see why the bill couldn't phase the new rules in the new tax year and make it so much simpler for all of us.
 
Phive_Phinger_Dan() said:
I’m in the same position, but I’m not as confident because of this statement.
“A contract is binding even if subject to a condition, as long as the condition is not within the control of either party.”
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What about that statement concerns you? If the only condition would be if you were getting dealer financing, and you are not applying for dealer financing then that clause wouldn’t apply. Also, one could argue that even if you did try for dealer financing, whether or not you qualify is out of both yours and the dealer’s hands, so it would still pass the test. Obviously this isn’t advice, but I really think a PO that specifically states that it can’t be cancelled unless dealer financing falls through fits the IRS requirement. I’m at least willing to argue the point with the IRS if it comes to it.
 
Partial solution? The dealer puts the car in service as a demo for a week. You get to demo it, and then buy it used?
When does the $4,000 kick in? OK, then switch demo to lease. Lease it until the $4,000 kicks in, then buy it and get the $4,000 for a used EV?
 
teslarati97 said:
A non-refundable deposit of 5% (or down payment) of the total contract price or more??

What Is a Written Binding Contract?
In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.
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(IANAL) The 5% rule looks like a generalized example to assist persons where your individual state may not have sufficiently defined contract laws.
 
Tommm said:
Partial solution? The dealer puts the car in service as a demo for a week. You get to demo it, and then buy it used?
When does the $4,000 kick in? OK, then switch demo to lease. Lease it until the $4,000 kicks in, then buy it and get the $4,000 for a used EV?
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The Cooper SE would have to be $25,000 or lower and 2+ years old.
 
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So I have a signed purchase order - but no non refundable deposit. What documents are needed when claiming the credit? Guessing that signed purchase order and the bill of sale info from the purchase of the car. So I file for the tax credit under the old rules as I believe I have a valid binding contract. What are the odds the IRS is actually going to audit me and argue whether or not the contract is binding?
 
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