Form 8936: Does this car's title quirk qualify?

[KeithKeithy]

Form 8936 question for next year's taxes (2022):

I found a 2020 PHEV vehicle which has 20,000 miles on it but has NEVER BEEN TITLED. A dealer kept it in its inventory as a 'dealer vehicle' and eventually sold it through a dealer auction to another dealer who is now offering it for retail sale. If bought, I would be the FIRST title owner. The car otherwise fit requirements and qualifies for a partial credit of about $4500

Assuming no legislative changes, would this car qualify for the 2022 PHEV tax credit because of this? IRS website instructions for form 8936 only refers to "original use" needs to begin with me. Would this situation qualify?

*fingers crossed* 🙂

[Mike9241]

code sec 30D says to get the credit original use must begin with the taxpayer.  there is no clarification in the code or regs as to what this means.  "dealer vehicle" tells us nothing.  it could have been used by the dealer as a demo, fleet vehicle or rental vehicle in which case, I would say original use began with the dealer. this is an opinion.   you may want to contact your state's Automotive Dealers Association to see if it can provide an answer. 

[Critter-3]

Interesting ... but 20K miles ???

Are you absolutely  sure the original dealer did not get the credit on that VIN # already ?  IMHO buy the car if it makes sense to do so but don't bank on getting the credit ... if you do it would be a bonus not a disappointment on something you were counting on. 

https://electrek.co/2022/04/15/which-electric-vehicles-still-qualify-for-us-federal-tax-credit/

[NCperson]

also, note that the credit is a 'nonrefundable credit' that can't be used in a future year....so that means the credit is limited to line 22 (or the credit for the auto which ever is LESS) of your Form 1040.

(I am referencing the line on the 2021 version of Form 1040, assuming the 2022 version will be the same line number)

[missileboss2022]

Similar question. I bought a demonstrator vehicle in 2023 that was titled to me as new with 2000 miles. The car's warranty began in 2021, but the car has never been registered so it classifies as new.  Would the date placed in service thus be in 2023 since that is when I took possession of the vehicle and thus placed it in my service?

[Cynthiad66]

The date placed in service would be the date you place the car in service for business.

Generally, demo cars that have never been registered, but are used in marketing for the dealer are considered new.