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Impact of Inflation reduction Act 2022 on Tax credits on Wrangler 4xe

Opus

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Side note - new in this bill is a provision for a $4,000 tax credit on a used EV, with income limits of $75,000 for single filers and $150,000 for joint filers.

I don’t think they thought that one through. While cars are technically new only once, used cars can pass through multiple hands with each buyer potentially able to claim the credit. Could be a relatively cheap method to wash out tax obligations entirely. Buy a car, wife “didn’t like it”, flip, repeat.
I can just see some idiot and his idiot cousin selling the same used EV back and forth to each other thinking, “chi-ching, chi-ching”
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AcesandEights

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I didn't read the bill, I don't know anything about tax law, and I didn't sleep at a Holiday Inn. But I think since this question is on a Jeep enthusiast forum, and I'm on the forum, that probably makes me an expert. What was the question again?
 

Naylia

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I can just see some idiot and his idiot cousin selling the same used EV back and forth to each other thinking, “chi-ching, chi-ching”
Well, currently IIRC you submit VINs when you claim the credit so they'll at least need to buy other cars, not just the single one over and over....but I'm sure someone will try.

IRS..."hmmm....why did you buy Car VIN 12345 17 times last year???"

But realistically, there will be IRS regulatory guidance issued when they implement the change that helps interpret the law written by Congress.
 

Opus

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Well, currently IIRC you submit VINs when you claim the credit so they'll at least need to buy other cars, not just the single one over and over....but I'm sure someone will try.

IRS..."hmmm....why did you buy Car VIN 12345 17 times last year???"
“I’m just soooooo indecisive.” :)
 

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sentience

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Won’t be long before decked out 4xE’s eclipse the $80K max value, making the tax credit a moot point.
Exactly. This is Tesla’s problem right now, in which only one of the Tesla Model 3 trims are eligible. The Tesla Model Y should be fine - as an “SUV” it gets that higher 80k limit.

Which is better than nothing. Tesla is no longer eligible under current tax credit system.
 

2nd 392

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https://arstechnica.com/cars/2022/0...es-will-qualify-for-the-new-tax-credit/?amp=1

Another problem someone else noticed. As written, it would need to be relaxed immediately, as it’s possible no EV currently sold the US meets the new battery manufacturing requirement.



It’s fine that we’re trying to encourage more domestic manufacturing. But it’s also obvious whoever wrote this has neither industry knowledge nor experience.
Like but respectfully disagree. Highly suspect “whoever” wrote it as intended knowing precisely their intended effects.
 

Jeeperz Kreeperz

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Side note - new in this bill is a provision for a $4,000 tax credit on a used EV, with income limits of $75,000 for single filers and $150,000 for joint filers.

I don’t think they thought that one through. While cars are technically new only once, used cars can pass through multiple hands with each buyer potentially able to claim the credit. Could be a relatively cheap method to wash out tax obligations entirely. Buy a car, wife “didn’t like it”, flip, repeat.
Good point. I’m just looking at the full text of the bill now, and I haven’t found a limit yet on the number of clean vehicles you can purchase and receive credit for.

I do see that Section 25E on pages 405 and 406 of the PDF lists the following requirements for the “Previously-Owned Clean Vehicles”:

‘‘(C) which is acquired by the taxpayer in a qualified sale, and“

Then, they define “Qualified Sale”, as:

‘‘(2) QUALIFIED SALE.—The term ‘qualified
sale’ means a sale of a motor vehicle—
‘‘(A) by a dealer (as defined in section
30D(g)(8)),
‘‘(B) for a sale price which does not exceed
$25,000, and
‘‘(C) which is the first transfer since the
date of the enactment of this section to a quali- fied buyer other than the person with whom the original use of such vehicle commenced.


I am by no means a lawmaker, but if I’m reading it correctly, the credit for a previously-owned clean vehicle would NOT apply to private sales, would NOT apply to vehicles sold for more than $25K, and would NOT apply more than once for the same VIN.

So yeah, no flipping an EV back and forth with your brother-in-law 4 times so you each get a $16K tax credit that year!
 

Bill_P

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https://arstechnica.com/cars/2022/0...es-will-qualify-for-the-new-tax-credit/?amp=1

Another problem someone else noticed. As written, it would need to be relaxed immediately, as it’s possible no EV currently sold the US meets the new battery manufacturing requirement.



It’s fine that we’re trying to encourage more domestic manufacturing. But it’s also obvious whoever wrote this has neither industry knowledge nor experience.
Isn't that usually the way a law works? The person writing it doesn't know a whole lot about the subject 😂
 

VNT

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I think after 2023 the batteries and materials have to be sourced from US or trade partner, no more 3rd world mines for materials and china batteries, so these credits will go away, only thing Manchin did correctlt
 

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Omen

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It’s fine that we’re trying to encourage more domestic manufacturing. But it’s also obvious whoever wrote this has neither industry knowledge nor experience.
What else is new? Hard to see reality from an ivory tower...

Omen
 

sentience

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Good point. I’m just looking at the full text of the bill now, and I haven’t found a limit yet on the number of clean vehicles you can purchase and receive credit for.

I do see that Section 25E on pages 405 and 406 of the PDF lists the following requirements for the “Previously-Owned Clean Vehicles”:

‘‘(C) which is acquired by the taxpayer in a qualified sale, and“

Then, they define “Qualified Sale”, as:

‘‘(2) QUALIFIED SALE.—The term ‘qualified
sale’ means a sale of a motor vehicle—
‘‘(A) by a dealer (as defined in section
30D(g)(8)),
‘‘(B) for a sale price which does not exceed
$25,000, and
‘‘(C) which is the first transfer since the
date of the enactment of this section to a quali- fied buyer other than the person with whom the original use of such vehicle commenced.


I am by no means a lawmaker, but if I’m reading it correctly, the credit for a previously-owned clean vehicle would NOT apply to private sales, would NOT apply to vehicles sold for more than $25K, and would NOT apply more than once for the same VIN.

So yeah, no flipping an EV back and forth with your brother-in-law 4 times so you each get a $16K tax credit that year!
I’m not the one suggesting flipping cars with your cousin.
 
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sethz

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Won’t be long before decked out 4xE’s eclipse the $80K max value, making the tax credit a moot point.
I have a slightly different pov ...Stellantis will increase the price to $79,999.99 just so that it's a win win for everyone ...lol :)) !!
 

Naylia

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Like but respectfully disagree. Highly suspect “whoever” wrote it as intended knowing precisely their intended effects.
I completely agree with you. The ramifications of this are fully understood. One objective...be "tough on China". Another objective..."build American battery capabilities". Another....someone has a large stake in a Candaian mine and likes to donate to political campaigns...
 

2nd 392

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I completely agree with you. The ramifications of this are fully understood. One objective...be "tough on China". Another objective..."build American battery capabilities". Another....someone has a large stake in a Candaian mine and likes to donate to political campaigns...
Oh No— “They” can’t have a stake, it’s illegal! Uh- their husband or son, etc have to make the investment. Must be nice!!
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