Deductions & credits

Yep, I agree lots of terms without clear definitions and seemingly used almost interchangeably and/or used differently in the same context or different context.  Per the 6 bullet point list of basic/summary rules for qualifying directly from the instructions in IRS Form 8936 only mentions this “Date Placed in Service” concept (2nd bullet point below) which matches Line 3 of the actual form (Enter date vehicle was placed in service (MM/DD/YYYY)), but somehow the acquisition date seems to be used or applied…as Turbo Tax asks for it in the walkthrough wizard…although it is not on the actual IRS 8936 form…which suggests if you filed manually the acquisition date would not be captured anywhere. Anyway, the issue is how Line 3, “Enter date vehicle was placed in service (MM/DD/YYYY)” is actually defined…per Turbo Tax and EV Forums I have been told it is one of the 9 definitions I listed below and that the whatever specific definition “they” provided was 100% accurate and that every other definition provided by someone else counter to “their” definition was absolutely wrong and if used would constitute tax fraud. 🤔😏🙄😣 I’m exaggerating slightly to try to be a little light hearted about this whole thing because it is very confusing and really quite ridiculous and because some people have some pretty strong opinions in these various forums about the information they are providing. 🙂

Having said that I found this legal settlement or court ruling that makes me personally believe (although I’m sure anyone who disagrees will tell me that I’m committing tax fraud if I use that definition…🙂), that the definition for Line 3 is pretty straightforward like the IRS probably originally intended…and that is #2 below…which is take physical possession by driving the vehicle off the dealership’s lot…as you cannot place the vehicle in service for one’s own personal or business purpose without having physical possession unless…

one had a business that involved purchasing or leasing a new vehicle, adding a billboard on top of the vehicle, keeping the vehicle at the dealership, and receiving payment for the advertisement or one had a business to purchase or lease a new vehicles from the dealership so that the dealership could then use the vehicle as a loaner or test drive vehicle that you got paid for maybe like a modified Turo scenario, but where the car was kept at the dealership instead of you physically driving it off the lot. 😀 Again there are always outlier cases and ridiculous arguments that could be made to identify an exception to the rule.

https://www.currentfederaltaxdevelopments.com/blog/2015/11/20/electric-vehicle-not-placed-in-service...

And just to be comprehensive…I personally think that the “Transition Rule for the IRA” with the definition of “Written Binding Contracts”  makes a lot of sense and was smart and fair because it specifically addressed the fact that many consumers were in limbo when the law essentially came out of nowhere…meaning if the “traditional definition” and use of the requirements specified in 8936 “Date Placed in Service” was immediately applied when the law went into effect…all those customers who placed orders or “purchased” EVs before that August 16th date, but had not taken delivery because their cars were not available (built and/or physically available to take possession?) would have been negatively impacted. I think the lawmakers, the President, and the IRS correctly understood that because there is/has been an EV shortage and lots of people had already placed orders or signed  “Written Binding Contracts” with a dealer for a future delivery date for their vehicle (when the law came out of nowhere), they needed to give those people a path forward to still qualify for the tax credit using 8936…instead of essentially punishing them with this new IRA law. But again that is just my simple minded opinion…that I’m sure many will disagree with me.

From Instructions on IRS Form 8936…

The following requirements must be met to qualify for the credit.
• You are the owner of the vehicle. If the vehicle is leased, only the lessor and not the lessee, is entitled to the credit.
• You placed the vehicle in service during your tax year.
• The vehicle is manufactured primarily for use on public streets, roads, and highways.
• The original use of the vehicle began with you.

• You acquired the vehicle for use or to lease to others, and not for resale.
• You use the vehicle primarily in the United States.

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The 9 possible definitions for  Line 3 in IRS Form 8936, “Enter date vehicle was placed in service (MM/DD/YYYY)”: