Hello,
Avid TT user for decades. Love the product! However I have a question on tax implications of the EV tax credit.
I am considering purchasing an electric car and taking the $7,500 credit. I cannot find any information about what happens if I sell the car after taking possession and claiming the credit. Do I have to repay the credit? Where would I report the sale in TT?
Credits for New Clean Vehicles Purchased in 2023 or After | Internal Revenue Service (irs.gov)
I believe the form is 8936:
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There are no limitations on how long you must own the car before you can sell it and the credit does NOT need to be repaid.
However, you may have a taxable gain. The credit reduces your cost basis. For example, of the car cost $50,000 then your cost basis after the credit is $42,500. If you sold it as a used car for $45,000, for example, you have a taxable capital gain of $2,500 (selling price more than cost basis).
The cost basis adjustment may also have an effect on depreciation if you use the car for business.
@Critter-3 wrote:
https://www.irs.gov/taxtopics/tc409
Also https://www.irs.gov/publications/p551
(page 5-6 of the pdf)
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