Will I get the tax incentive if I sell the vehicle before the end of the year?

Discussion in 'Prime Main Forum (2017-2022)' started by Schrauger, Oct 26, 2021.

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  1. Schrauger

    Schrauger Junior Member

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    I purchased a 2021 Prius Prime back in April. Due to the recent used market prices, I'm considering selling it to carvana (for way more than I paid for it) and upgrading to a 2022 Prius Prime for about the same price as my trade-in.

    According to my taxes last year, I had enough liability to cover two full credits. However, I wanted to know if I would still be eligible for the first car's $4500 credit if I don't own the car when I file taxes next year.

    Ideally, I'd like to get the credit for both vehicles. If I can't do that, it isn't worth my time to upgrade, especially since the 2022 basically has 0 changes from the 2021 model.

    Has anyone here filed for the tax credit after selling the car? Will I run into any problems if I try this route of upgrading to a newer year and claiming the tax credit on both cars?
     
    #1 Schrauger, Oct 26, 2021
  2. schja01

    schja01 Senior Member

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    Dealers in effect do this all the time when they lease vehicles in effect. I say you’ll be fine if you have proof you purchased the vehicles during the year. When you actually file shouldn’t matter.
     
    #2 schja01, Oct 26, 2021
  3. ETC(SS)

    ETC(SS) The OTHER One Percenter.....

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    ....The vehicle should not be purchased for the sole purpose of reselling it.
    ( How Does the Federal Tax Credit for Electric Cars Work? )
    I think you'll be OK but I would get confirmation that there's no limit for individuals or families.

    You may want to wait a bit and see what happens in the "three lies for the price of one" BBB plan.
    There might be significant changes in future rebates that might make you wish that you had waited a bit - but OTOH if you're buying new cars all the time it probably won't make much of a diff to you personally.

    Good Luck!
    Post pics if you find a new car!
     
    #3 ETC(SS), Oct 26, 2021
  4. Salamander_King

    Salamander_King Senior Member

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    #4 Salamander_King, Oct 26, 2021
  5. PT Guy

    PT Guy Senior Member

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    Not exactly. The car on the lot is owned by a bank. When the dealer sells it to the lessor (bank or the auto maker's finance arm) then that first buyer gets the tax credit. The car on the lot has a manufacturer's certificate of origin or statement of origin serving as the title document. The first owner to get a state title (the lessor bank or car buyer) gets the credit.
     
    #5 PT Guy, Oct 27, 2021
  6. loaflord

    loaflord Junior Member

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    You can. You will owe short term capital gains tax (your income tax rate) on the amount of profit generated by selling the car, and your $4,502 tax credit reduces your cost basis dollar for dollar.
     
    #6 loaflord, Dec 11, 2021
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