My daughter bought a used EV in 2024 and received a $4000. tax credit.
How log must she own the car before transferring it to another owner ?
You already have 3 different answers posted on the Intuit page.........on says 3 years or she must pay back the credit.
One says there is no limitations and no need to pay back the credit.
The other says 30 days.
What is the correct answer.......this is for a used EV and is a second owner tax credit.
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Go to this IRS website - https://www.irs.gov/credits-deductions/used-clean-vehicle-credit
IRS Form 8936 Clean Vehicle Credits page 3 - https://www.irs.gov/pub/irs-pdf/i8936.pdf#page=3
Under Previously Owned Clean Vehicle Certification and Other Requirements
You have not claimed another previously owned clean vehicle credit in the 3 years before the purchase date.
There is not a specific time frame that she must own it to not have to pay back the credit. However, if she bought the car with the intention of selling the car, then she was not eligible for the credit. As one of the criteria to claim the credit is that you must not purchase it with the intention of reselling it, it has to be for personal use.
The 3 years applies to eligibility to claim the credit. If she claimed the credit in 2024, she would not be eligible for claim it again until after the 3 year mark in 2027.
In order for her not to have to repay the credit, she simply must still be eligible for the credit. In order to qualify, one must meet the following criteria:
For the vehicle to qualify the following has to be met:
This Credit is Non-Refundable. meaning she must have a tax liability to use the credit against and the credit cannot be carried forward. The Used EV Credit is worth 30% of the purchase price up to $4,000
Click here to see if your make and model qualify.
Be aware, that if she sold the car shortly after purchasing it, it is possibly that she will have to report a gain on the sale as she would have to reduce the basis of the car by the credit she received. This means if she paid $25,000 for the car and received a $4,000 credit, her basis would be $21,000. If she then sold the car for $25,000, she would have a $4,000 capital gain that she would need to report on her return.
(Edited 1/28/2025 @12:29PM PST) @RandysF
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