Legacy Pure Pricing, August 2022 confirmation, possible Touring upgrade, new order agreement date when finalizing, qualify for IRA transition rule?

[Impatient7536]

hello everyone, got a situation here that I'm trying to get some feedback on. will be consulting my CPA also

made a pure reservation in May 2022 and did the August 10 2022 confirmation to secure legacy pricing and hopefully lock in the federal tax credit. when i did this, an order agreement was generated (#1). with more info tricking in these past couple weeks, it seems like those in my position of doing the August 2022 confirmation had the 7.5k fed tax credit "accepted."

i'm currently trying to upgrade to a touring at legacy pricing, with the 7.5k lucid credit and the 7.5k fed tax credit. my SA said that a new order agreement (#2) with the current date will be generated to reflect the upgrade, and regardless of upgrades or not, that all finalized orders will have new order agreements generated.

So, a couple questions:

1) assuming i keep it a pure, which order agreement do i use? to get the tax credit, i'll have to use agreement #1, but is that the right way to file my tax amendment?

2) does upgrading "negate" agreement #1, since the car is now different? meaning that i'll have to use agreement #2 date for my touring, so i won't qualify for the tax credit?

3) for those taking advantage of the transition rule and claimed it on their tax returns, i assume you used agreement #1's date even though you also got a new date on agreement #2?

sorry, rambling and all over the place, but i hope you guys understand the dilemma that i'm in. thanks!

 

[nfsdragster]

I am curious to know about this myself. Pure was confirmed aug 11,2022. Genuinely considering upgrading to touring. But would I be eligible for the ira tax credit considering the order was confirmed for the pure, it is technically the same car. Just a different trim which is the upgrade. Because the brand is lucid, model is air these don't change. Pure and touring are just the trims. If anyone has consulted this with a good cpa. Kindly share your experience. Sooner the better. Because I have to confirm my order soon.

 

[mnat]

I think this is covered on a different thread. The question being asked is different and it’s what date would be on the purchase agreement if upgrading to a Touring.

Purchase date vs. delivery date​

If you entered a written binding contract to buy a vehicle after December 31, 2021, and before August 16, 2022, but took delivery on or after August 16, 2022, you may elect to claim the credit based on the prior rules.

 

[Babyrocko1908]

This contradicts what Rivian is advising for a similar situation.

It completely contradicts it and in my opinion is wrong. The transition rule applies to written and binding contracts prior to August 16, 2022. The point of the transition rule is to grandfather those contracts under the old rules prior to the IRA being passed. The law is crystal clear on this. I don't understand why we're still discussing this.

1) If you had a written and binding contract PRIOR to August 16, 2022, YOU ARE GRANDFATHERED UNDER THE OLD TAX CREDIT RULES. The IRA doesn't apply to these contracts only contracts from August 16, 2022.

2) You cannot claim the tax credit on your 2022 returns UNTIL you take delivery. Why? Because you haven't yet purchased the car. If you have already filed, you have to file an amended return. If you haven't filed, ask for an extension. When you file, per the transition rule, you use the date of August 15, 2022 which is the day before the enactment of the IRA.

This is not financial advice!!

 

[Bobby]

It completely contradicts it and in my opinion is wrong. The transition rule applies to written and binding contracts prior to August 16, 2022. The point of the transition rule is to grandfather those contracts under the old rules prior to the IRA being passed. The law is crystal clear on this. I don't understand why we're still discussing this.

1) If you had a written and binding contract PRIOR to August 16, 2022, YOU ARE GRANDFATHERED UNDER THE OLD TAX CREDIT RULES. The IRA doesn't apply to these contracts only contracts from August 16, 2022.

2) You cannot claim the tax credit on your 2022 returns UNTIL you take delivery. Why? Because you haven't yet purchased the car. If you have already filed, you have to file an amended return. If you haven't filed, ask for an extension. When you file, per the transition rule, you use the date of August 15, 2022 which is the day before the enactment of the IRA.

This is not financial advice!!

What you are saying makes perfect sense, the one sentence that is left unclear by the IRS is the one where they say if you purchased before the transition rule. So if the contract was signed before August 16 you may be in luck because they don't specify a delivery date in 2022. Of course, we are back to the question of what is a binding contract. It sure is weird that they made so many references to the transition rule but left pre-Aug 21 so open ended!

 

[Impatient7536]

so here's the passage in discussion for reference:

"Purchase date vs. delivery date​

If you entered a written binding contract to buy a vehicle after December 31, 2021, and before August 16, 2022, but took delivery on or after August 16, 2022, you may elect to claim the credit based on the prior rules. 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.

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. "

they only mention "took delivery on or after August 16, 2022." there's no mention of an end date. the only section that does have an "end date" reference, is "If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023"

but from my understanding, that 2nd section/sentence doesn't apply to us. the part that applies to us, and should be concerned about, is the first paragraph right?

 

[Bobby]

so here's the passage in discussion for reference:

"Purchase date vs. delivery date​

If you entered a written binding contract to buy a vehicle after December 31, 2021, and before August 16, 2022, but took delivery on or after August 16, 2022, you may elect to claim the credit based on the prior rules. 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.

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. "

they only mention "took delivery on or after August 16, 2022." there's no mention of an end date. the only section that does have an "end date" reference, is "If you purchased a vehicle between August 16, 2022 and December 31, 2022 but don't take delivery of the vehicle until 2023"

but from my understanding, that 2nd section/sentence doesn't apply to us. the part that applies to us, and should be concerned about, is the first paragraph right?

Correct, @Babyrocko1908 has shown me the light. I was only concerning myself with the second paragraph.

 

[Impatient7536]

right, so now the issue is, im told that when finalizing the order (whether i'm upgrading or not), i will be provided a new order agreement with the NEW date. if that's the case, do we use the order agreement #1 date, or the #2 date, cuz obviously there is a $7.5k difference depending on whcih date you use.

or is my SA wrong in that when finalizing, the new order agreement won't have the new date? or the new date is only for upgrades? because if that's the case, i'll probably stick with the pure to try to get the tax credit and lucid credit.

 

[Babyrocko1908]

right, so now the issue is, im told that when finalizing the order (whether i'm upgrading or not), i will be provided a new order agreement with the NEW date. if that's the case, do we use the order agreement #1 date, or the #2 date, cuz obviously there is a $7.5k difference depending on whcih date you use.

or is my SA wrong in that when finalizing, the new order agreement won't have the new date? or the new date is only for upgrades? because if that's the case, i'll probably stick with the pure to try to get the tax credit and lucid credit.

Your new order agreement for Touring upgrade should still reflect the date of when you originally confirmed and converted your order to non-refundable.

 

[Impatient7536]

update, for those interested, my SA called me today to correct what she said. she did some digging and found that the upgrade will keep the same date, so i went ahead and confirmed. just as @Babyrocko1908 said, the finalized order agreement has the August 2022 date for a pure to touring upgrade, if you "confirmed" before August 16, 2022.

few more questions to see what you all think:

1) if my touring metal roof gets delivered in 2024. do you think i'll be able to claim the tax credit still? the IRS language didn't put an "end date," so since i locked in before August 16, i can still technically claim it in 2024? if so, when would i claim it? during my 2024 tax returns? do an amendment for 2023 tax returns?

2) does the fed tax credit transition rule apply to leases as well? i just thought about that and realized it's something i might have over looked, since i was planning on leasing, but am flexible.

thanks!

 

[Babyrocko1908]

update, for those interested, my SA called me today to correct what she said. she did some digging and found that the upgrade will keep the same date, so i went ahead and confirmed. just as @Babyrocko1908 said, the finalized order agreement has the August 2022 date for a pure to touring upgrade, if you "confirmed" before August 16, 2022.

few more questions to see what you all think:

1) if my touring metal roof gets delivered in 2024. do you think i'll be able to claim the tax credit still? the IRS language didn't put an "end date," so since i locked in before August 16, i can still technically claim it in 2024? if so, when would i claim it? during my 2024 tax returns? do an amendment for 2023 tax returns?

2) does the fed tax credit transition rule apply to leases as well? i just thought about that and realized it's something i might have over looked, since i was planning on leasing, but am flexible.

thanks!

I just sent you a message.