Anyone know what happens if you sell your Prius? I heard you have to give back some of your tax deduction if you sell it within three years, but I can't find any info that says this officially. What tax forms do I have to fill out? How does the 'give back' work? Has anyone actually done it? Thanks for your time, John
No one has "done it", the 2006 tax thing, that is, since it's still 2005. If you get a tax credit for a Prius purchase in 2006, you can claim it on your taxes filed in January 2007... While the Prius is technologically advanced, it still can't time travel...
The "typical" sale or other disposition within three years does not result in a recapture event. § 1.179A–1 Recapture of deduction for qualified clean-fuel vehicle property... ... (b) Recapture event (1) Qualified clean-fuel vehicle property (i) In general. A recapture event occurs if, within 3 full years from the date a vehicle of which qualified clean-fuel vehicle property is a part is placed in service, the property ceases to be qualified clean-fuel vehicle property. Property ceases to be qualified clean-fuel vehicle property if— A) The vehicle is modified by the taxpayer so that it may no longer be propelled by a clean-burning fuel; B) The vehicle is used by the taxpayer in a manner described in section 50(b); C) The vehicle otherwise ceases to qualify as property defined in section 179A( c ); or D) The taxpayer receiving the deduction under section 179A sells or disposes of the vehicle and knows or has reason to know that the vehicle will be used in a manner described in paragraph (b)(1)(i) (A), (B), or ( C ) of this section. (ii) Exception for disposition. Except as provided in paragraph (b)(1)(i)(D) of this section, a sale or other disposition (including a disposition by reason of an accident or other casualty) of qualified clean-fuel vehicle property is not a recapture event.
Thanks for all your posts. So if I'm reading this right, when I sell my 2004 Prius (to get a 2006!), I don't have to do anything or give anything back from my 2004 tax deduction unless I know the car won't be used as a hybrid vehicle. That helps a lot. John
