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Trying to determine if I qualify for the Used Clean Vehicle Credit which Sales Price do I use from the bill of sale

I am trying to see if I qualify for the Used Clean Vehicle Credit on my 2023 tax return.  I am single filer and my AGI is $75K so I know I qualify the credit. I purchased my used 2018 Tesla Model 3 on 6.3.2023.  When it comes the Sales Price must be under $25K, this is where I am trying to see if I qualify.  From the IRS website for qualifications for used credit the line states:

  1. Have a sale price of $25,000 or less. Sale price includes all dealer-imposed costs or fees not required by law. It doesn't include costs or fees required by law, such as taxes or title and registration fees.

The breakdown of my bill of sale:

Price of vehicle: $32,994.00

Used car trade in:   (500.00)

difference:           $32494.00

document fee          $347.26

opt electronic fee      $25.00

State Tax                  $2793.63

County Tax                $328.66

License/Title             $280.00

Total Price:          $36,268.55

Down Payment     ($8000.00)

hold fee                    ($500.00)

Subtotal                 $28,768.55

 

Now referring back to item #1 for purchase qualification. Would I take $32,494.00 add document fee of $347.26 plus electronic fee of $25.00 and then subtract my down payment and hold fee of $8500.00 equaling: $24,366.26

 

I am trying to understand how to determine my purchase price. It sounds like I don't include Sales tax/County/License Title fee in the calculation is that correct? I included document and electronic fee minus my down payment and hold fee.   I certainly do not want to take the credit if I don't qualify for it but at the same time if I do, I want to be able to take the credit.

 

AND, from what I read the Dealership had to report my sale to IRS within 15 days of my purchase and if they did not, then I am not eligible for the credit - is that correct? 

 

Thank you in advance for your assistance.

 

 

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1 Reply
jtax
Level 10

Trying to determine if I qualify for the Used Clean Vehicle Credit which Sales Price do I use from the bill of sale

You can't subtract your payments or trade in credit from the purchase price.  It appears your purchase price is $32,994 plus the document fee (which is just a price increase the dealer tries to hide as a bogus fee). Maybe the electronic fee also (maybe not if they are state imposed fees). 

 

If you think about it, if you were able to subtract, say, the down payment from the purchase price, then if you paid 100% in cash your calculated price would be zero. That doesn't make sense because you have actually paid $32,994.

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