Existing Pure Reservation- Upgrade to Touring at Legacy Price with $7,500 Credit?

[epradox]

I signed the contract before August 16, 2022 before IRA went into effect and was told that I would be eligible for the EV credit. My AT is at the service center currently. I was talking to the DA and told that i wont be eligible for the EV tax credit. but i will get the $7500 credit that Lucid is offering if I finish my transaction before April 1, 2023 (which I will). I was hoping that I can be lucky to get both federal tax credit plus lucid credit. when i look up on line, i wont be eligible for the federal tax credit since i did not take the delivery before the end of last year. I am glad that I am getting immediate discount rather wait until i file my taxes in April of 2024 but this was a bummer. IRS website says as below: https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before

Purchase date vs. delivery date
If you entered a written binding contract to buy a vehicle before August 16, 2022, but took possession on or after August 16, 2022, and before January 1, 2023, you may claim the credit based on the prior rules and disregard the assembly requirement.
If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023, see Credit for New Clean Vehicles Purchased in 2023 and After.

So Rivian just sent me an email and I am assuming the binding purchase agreement with Lucid will fall under the same rules

"

Please note two key considerations:​

​ From the Guidance: “To elect the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return.”​ ​ From the Instructions: “Taxpayers who took delivery in 2023 or after must use August 15, 2022 as the date placed in service when filing out Form 8936.​

"

It looks like we just need to put that the car was placed in service august 15th 2022 if we signed the purchase agreement and can amend the 2022 tax filing after delivery to take the $7500 credit.

Guess im keeping my pure reservation for now.

 

[Babyrocko1908]

So Rivian just sent me an email and I am assuming the binding purchase agreement with Lucid will fall under the same rules

"

​ ​ Please note two key considerations:​

​ ​ ​ From the Guidance: “To elect the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return.”​ ​ From the Instructions: “Taxpayers who took delivery in 2023 or after must use August 15, 2022 as the date placed in service when filing out Form 8936.​

"

It looks like we just need to put that the car was placed in service august 15th 2022 if we signed the purchase agreement and can amend the 2022 tax filing after delivery to take the $7500 credit.

Guess im keeping my pure reservation for now.

It does. You are eligible for the $7,500 Fed Tax credit. Check out the other thread.

 

[Lucken]

So Rivian just sent me an email and I am assuming the binding purchase agreement with Lucid will fall under the same rules

"

​ ​ Please note two key considerations:​

​ ​ ​ From the Guidance: “To elect the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return.”​ ​ From the Instructions: “Taxpayers who took delivery in 2023 or after must use August 15, 2022 as the date placed in service when filing out Form 8936.​

"

It looks like we just need to put that the car was placed in service august 15th 2022 if we signed the purchase agreement and can amend the 2022 tax filing after delivery to take the $7500 credit.

Guess im keeping my pure reservation for now.

Wouldn't there be an obvious conflict in dates between when the car was delivered and the earlier 8/15/22 'placed in service' criteria...unless of course you actually took delivery on or before 8/15/22. How does one place a vehicle in service prior to its delivery date? Unless I'm missing something.

 

[epradox]

Wouldn't there be an obvious conflict in dates between when the car was delivered and the earlier 8/15/22 'placed in service' criteria...unless of course you actually took delivery on or before 8/15/22. How does one place a vehicle in service prior to its delivery date? Unless I'm missing something.

Yeah logically you're right but I guess there is an exception called the transition rule for when the IRA bill went into effect that the IRS is allowing.

"Enter 08/15/2022 if you qualify and elect to apply the transition rule discussed below.

Transition rule.

If you purchased, or entered into a written binding contract to purchase, a qualified plug-in electric drive motor vehicle after 2021 and before August 16, 2022, you may elect to treat such vehicle as having been placed in service on August 15, 2022, the day before the enactment date of the Inflation Reduction Act of 2022."

 

[Lucken]

It's too bad we can't use the reservation date as the actual date of the 'contract'.

 

[kirpal]

So Rivian just sent me an email and I am assuming the binding purchase agreement with Lucid will fall under the same rules

"

​ ​ Please note two key considerations:​

​ ​ ​ From the Guidance: “To elect the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return.”​ ​ From the Instructions: “Taxpayers who took delivery in 2023 or after must use August 15, 2022 as the date placed in service when filing out Form 8936.​

"

It looks like we just need to put that the car was placed in service august 15th 2022 if we signed the purchase agreement and can amend the 2022 tax filing after delivery to take the $7500 credit.

Guess im keeping my pure reservation for now.

I would love to hear from someone in this forum who meets this requirement (i.e. entering binding contract before August 16, 2022 to qualify for federal tax credit and qualify for the Transition rule) and takes the delivery of vehicle in 2023, and files and gets EV tax credit. Once I take the possession of my vehicle in a few days, this is going to be my second job (to be on hold for IRS agents for long hours and Turbotax). I have already filed for 2022 but may need to do an amended return.

 

[elin]

I confirmed before IRA was signed and took delivery this Tuesday. Filed my taxes last night and I got the $7500 credit. It was accepted by IRS, though I'm not sure that has much meaning, who knows whether they decide to audit me later.

 

[Impatient7536]

I would love to hear from someone in this forum who meets this requirement (i.e. entering binding contract before August 16, 2022 to qualify for federal tax credit and qualify for the Transition rule) and takes the delivery of vehicle in 2023, and files and gets EV tax credit. Once I take the possession of my vehicle in a few days, this is going to be my second job (to be on hold for IRS agents for long hours and Turbotax). I have already filed for 2022 but may need to do an amended return.

i dont think you'll have issues getting the tax credit if you did the "confirmation" back in August 2022. some members have posted successfully claiming the tax credit on their return, the IRS "accepting" their refund, and the refund hitting their bank account.

the issues most are debating now are a combination of

1) whether or not the IRS will clarify the language.
2) if/when they do clarify the language, which way the decision will go. people are interpreting the IRS language differently, each with their own merits and case.
3) once that decision is made, and if ruled against our favor, how hard the IRS will come down on the audits.

again, just because a tax return is "accepted" by the IRS doesn't mean that we're 100% in the clear. they can still audit us for whatever reason they want, whether it's specifically for the EV tax credit, or other red flags that they found (and the EV tax credit being collateral damage).

there's probably even a small chance that nothing will be done since this will be a one time thing and not many people were affected, in the grand scheme of the IRS tax season. hope for the best, prepare for the worst

 

[kirpal]

I confirmed before IRA was signed and took delivery this Tuesday. Filed my taxes last night and I got the $7500 credit. It was accepted by IRS, though I'm not sure that has much meaning, who knows whether they decide to audit me later.

This is a great news. Thanks for confirming. I will now need to file an amended return and hope it goes through. This essentially makes our purchase $15000 cheaper ($7500 Lucid credit and $7500 federal EV credit)

 

[Babyrocko1908]

i dont think you'll have issues getting the tax credit if you did the "confirmation" back in August 2022. some members have posted successfully claiming the tax credit on their return, the IRS "accepting" their refund, and the refund hitting their bank account.

the issues most are debating now are a combination of

1) whether or not the IRS will clarify the language.
2) if/when they do clarify the language, which way the decision will go. people are interpreting the IRS language differently, each with their own merits and case.
3) once that decision is made, and if ruled against our favor, how hard the IRS will come down on the audits.

again, just because a tax return is "accepted" by the IRS doesn't mean that we're 100% in the clear. they can still audit us for whatever reason they want, whether it's specifically for the EV tax credit, or other red flags that they found (and the EV tax credit being collateral damage).

there's probably even a small chance that nothing will be done since this will be a one time thing and not many people were affected, in the grand scheme of the IRS tax season. hope for the best, prepare for the worst

I'm a firm believer that the IRS audits for other things flagged in a tax return like excessive 1099's or excessive deductions and donations in comparison to your income. I heard a recent story where a tax filer had around $45,000 in verifiable W2 income yet filed that she had over $16,000 in donations.

I'm not concerned with being audited at all. Every penny of the income on my return is verifiable as are our deductions. We also took a portion of the $1,000 max Federal Credit for my EVSE purchase and installation so we got two EV related credits for 2022 from the federal government.

 

[shotahao]

I'm a firm believer that the IRS audits for other things flagged in a tax return like excessive 1099's or excessive deductions and donations in comparison to your income. I heard a recent story where a tax filer had around $45,000 in verifiable W2 income yet filed that she had over $16,000 in donations.

I'm not concerned with being audited at all. Every penny of the income on my return is verifiable as are our deductions. We also took a portion of the $1,000 max Federal Credit for my EVSE purchase and installation so we got two EV related credits for 2022 from the federal government.

Just curious how are you able to get the confirmation doc in August 2022? I didn’t save it when I saw it but now it’s gone

 

[Babyrocko1908]

Just curious how are you able to get the confirmation doc in August 2022? I didn’t save it when I saw it but now it’s gone

Have you taken delivery? If not, you should be able to get it from your dashboard on the Lucid website. I saved my original email tho so I just used that.

 

[shotahao]

Have you taken delivery? If not, you should be able to get it from your dashboard on the Lucid website. I saved my original email tho so I just used that.

Yeah. I will take Touring delivery next Monday. So the Pure confirmation is gone, I can only see the email without any doc attachment on August 2022. Is that enough to file?

 

[Babyrocko1908]

Yeah. I will take Touring delivery next Monday. So the Pure confirmation is gone, I can only see the email without any doc attachment on August 2022. Is that enough to file?

Did you upgrade from Pure to Touring? If so, what is the order date on your upgraded documents? If it doesn't, I would reach out to your DA and tell him you need the Purchase Agreement Order Confirmation Summary that shows the August 2022 confirmation date. But check your purchase agreement too. It might be there along with your Purchase Agreement Final Price Sheet.

 

[shotahao]

Thanks! The date 08/10 is shown in Purchase Agreement! I am confused in the transition rule since it only mentioned plug-in electric vehicles. Are we under that category as well?

 

[Babyrocko1908]

Thanks! The date 08/10 is shown in Purchase Agreement! I am confused in the transition rule since it only mentioned plug-in electric vehicles. Are we under that category as well?

Yes, our Airs are Plug-in Electric vehicles. You are good to go to file for the credit after you take delivery. Just use the August 15, 2022 date on the form. Then include the purchase agreement that shows the 8/10 date.

Early congratulations to you on your soon to be delivery! It's an amazing car and you will love it!

 

[PrecociousToddlr]

So I met with my CPA, and he told me that I wouldn't be able to file for the $7,500 EV Tax Credit due to this clause:

What is a written binding contract?​

In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before

He claims that a $300 deposit is not significant. Should I find a less stringent CPA to do my taxes?

 

[Babyrocko1908]

So I met with my CPA, and he told me that I wouldn't be able to file for the $7,500 EV Tax Credit due to this clause:

What is a written binding contract?​

In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.

https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before

He claims that a $300 deposit is not significant. Should I find a less stringent CPA to do my taxes?

He's wrong. The detriment you incurred of potentially losing your $300 deposit is enough consideration to form a binding contract. Courts and the law rarely interfere in contracts unless they are illegal, unconscionable, or are missing some terms. None of these apply here. Our contracts became binding the minute we converted our reservations to non-refundable orders.

THIS IS NOT FINANCIAL ADVICE!

 

[demhoise]

Hello all for those who successfully upgraded from Air Pure to Air Touring with legacy price what are your conversion dates and what are your delivery date just trying to see the timelines.
Thanks

 

[lpinprov]

I reached out to my SA last week, and he identified a car that met my desired features (Zenith Red, 19", Glass Canopy (required for the $7500 discount), Santa Cruz interior); he put it on hold for a couple of days. I updated info in my account needed to process the order, and they asked for confirmation of my upgrade, which I agreed to this past Monday (3/13). My car came off the production line that day, and is scheduled to be shipped today. I am scheduled to pick it up next Sunday (3/26). So, seems like they are moving quickly. Not sure what that says about demand and their backlog....