$1,700 tax credit expires Sept. 30

[Grey]

Order before midnight Sept. 30 to qualify for the $1,700 tax credit.

 

October 1, 2009 - the credit drops to $850.

[DanM]

I don't think the order date matters.

 

I ordered my Fusion Hybrid in early August, hoping to get it before Sept 30 so I could get the $1,700 tax credit. (I ordered it because I couldn't find the car with the color/options I wanted anywhere in the greater Chicago area.) It doesn't look like I'll get the car today. I looked at the IRS website yesterday, and all documentation on the tax credit referred to the purchase date, NOT the order date. To clarify, I called the IRS. They said the car had to be purchased and placed in service by 9/30/2009. I mentioned that I had heard the ordered date would suffice. She replied that "Well, they are trying to sell cars". It appears that I'll only get the $850 tax credit.

 

If anyone has any actual proof (such as a IRS website page or a scan of an official document) that the IRS will accept an order date as opposed to a purchase date, please let me know!

[akirby]

I don't think the order date matters.

 

I ordered my Fusion Hybrid in early August, hoping to get it before Sept 30 so I could get the $1,700 tax credit. (I ordered it because I couldn't find the car with the color/options I wanted anywhere in the greater Chicago area.) It doesn't look like I'll get the car today. I looked at the IRS website yesterday, and all documentation on the tax credit referred to the purchase date, NOT the order date. To clarify, I called the IRS. They said the car had to be purchased and placed in service by 9/30/2009. I mentioned that I had heard the ordered date would suffice. She replied that "Well, they are trying to sell cars". It appears that I'll only get the $850 tax credit.

 

If anyone has any actual proof (such as a IRS website page or a scan of an official document) that the IRS will accept an order date as opposed to a purchase date, please let me know!

 

Ask the IRS why their own form shows an example where the customer purchases a car in September but doesn't take delivery of the car until January - how is that possible except as a factory order?

 

The purchase date determines the amount of the credit. The "placed in service" date determines the tax year that you're eligible for the credit.

 

e.g. if you ordered on Sept. 20th and took delivery in December you can claim it on your 2009 tax return prepared in spring 2010. However if you don't take delivery until January 2010 then you would not be able to claim the credit until the 2010 tax return in spring 2011.

 

This has been discussed extensively. Do a search.

[DanM]

Ask the IRS why their own form shows an example where the customer purchases a car in September but doesn't take delivery of the car until January - how is that possible except as a factory order?

 

The purchase date determines the amount of the credit. The "placed in service" date determines the tax year that you're eligible for the credit.

 

e.g. if you ordered on Sept. 20th and took delivery in December you can claim it on your 2009 tax return prepared in spring 2010. However if you don't take delivery until January 2010 then you would not be able to claim the credit until the 2010 tax return in spring 2011.

 

This has been discussed extensively. Do a search.

 

Thanks for the reply.

 

It is entirely possible that my search skills are lacking, but I cannot find what you are referring to. When you say "Ask the IRS why their own form" I assume you mean Form 8910, Alternative Motor Vehicle Credit. I cannot find any reference to ordered date either on the Form itself, or the instructions to the form. (I also cannot find the example you refer to). Am I looking at the wrong form?

 

My search results show a lot of people talking about using the ordered date, but I am looking for some concrete evidence. When asked by the IRS why I thought I could use the order date rather than the purchase date, I don't want to reply, "Well, someone poseted it on their blog or in a forum, so it must be true...."

 

Thanks in advance!

[jason29927]

http://www.irs.gov/newsroom/article/0,,id=157557,00.html

 

"For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."

 

The vague point is whether or not ordering is the same as purchasing. This paragraph makes it sound like it, because in what possible other circumstance could you buy a car but not put it into service until months later? Ordering has to be what they mean, especially if you've put down a deposit.

[akirby]

http://www.irs.gov/newsroom/article/0,,id=157557,00.html

 

"For example, if consumer A purchases a Prius on Sept. 30, 2006, and takes possession in February 2007, consumer A can claim the full credit for 2007, the year in which the vehicle is placed in service. On the other hand, if consumer B purchases a Prius on Oct. 1, 2006, and takes possession of the vehicle in February 2007, Consumer B can claim 50% of the credit in 2007, the year in which the vehicle is placed in service."

 

The vague point is whether or not ordering is the same as purchasing. This paragraph makes it sound like it, because in what possible other circumstance could you buy a car but not put it into service until months later? Ordering has to be what they mean, especially if you've put down a deposit.

 

Exactly. That is Ford's interpretation also. There is no other logical explanation. Form 8910 is simply too vague and doesn't differentiate between the 2 dates like the example above. Common thinking is they will update form 8910 to be more specific for the 2009 tax year.

[Grey]

Thanks for posting that link Jason. You and akirby are exactly correct. Hopefully the tax software program suppliers will make it simplier for people to understand next year. What they leave out on the 8910 form is the purchase date tied to the % credit. You will be asked to show the % of the total tax credit you are claiming - which means you have to know the rules for your vehicle specifically. The delivery date is when you take possession (not when you ordered) - that controls the tax year for which the credit may be claimed.

 

It won't be the first time an IRS agent had no clue about the rules.

 

Sadly, too many people will be confused and miss the credit they are entitled to, or put the order date in the delivery date box, trying to make the form look right. :finger:

[DanM]

Thanks! That's the example I was looking for.

[mirak]

While I agree that it doesn't seem logical for the IRS to distinguish between date of "purchase" and date "placed in service" unless "purchase" means "order" - you are making a big assumption that the internal revenue code or regulations are logical.

 

It is also logical to argue that, by definition, a "purchase" is different from an "order." From dictionary.com:

1. Purchase: "to acquire by the payment of money or its equivalent; buy"

2. Order: "to direct to be made, supplied, or furnished"

 

When you order something, you purchase it after the order. Sometimes right after the order (McDonalds), sometimes later (Applebees).

 

Hope it works out for you guys that are straddling the deadline - especially if you're straddling the 3,400 v. 1,700 deadline! I'm glad I know for sure that I completed the purchase of my car before October 1. :)

[wstcoaster07]

I was kind of worried about this too and my dealer offered up the idea that if the car was not delivered by the 30th, I could go through all of the financing and actually purchase the car prior to arrival. Luckely I got the car just in time so I did not have to worry about it.

Would be weird to purchase a car you arent sure will be delivered correctly, but it is an option I guess (assuming your dealership is not already closed for the night)

[Grey]

The dealers have had lots of communications from Ford that explain the process, but alas, many don't share everything with salespeople. It's high on our radar because we have a vested interest - to many of them it's just another detail amid the millions.

 

When you special order a vehicle is represents a committment to pay for it and take delivery when it arrives. The IRS recognizes that and allows for the time lag between "Purchase" and delivery.

 

If your order is in, keep a dated copy with your tax records. (There has to be one because Ford requires a faxed copy of it - and your drivers license- to verify the order is retail and not a stock order). :shift: