Transfer from my son to myself, do I need to pay tax in CA?

[Gimme_my_MME]

But I was promised free money?!???

Sponsored

 

[Maquis]

If you W2 Federal withholding on your pay stub shows $7500 or more, you will qualify for the full tax credit.

WITHHOLDING is irrelevant. Tax liability is what matters. For 2023, anyway.

 

[Txxthie]

WITHHOLDING is irrelevant. Tax liability is what matters. For 2023, anyway.

It's a way of gauging how much tax liability you have with your W2 job/salaried income. Obviously there are other ways to increase your income/tax liability (selling stocks, dividends, interest, roth conversion, etc.).

In addition AGI can be reduced to fall below the caps for individuals or married couples by contributing to a 401K. Those over 50 can lower AGI up to $30k with a maximum 401k contribution for 2023.

Always consult with a tax professional, not financial advice.

 

[TaxmanHog]

What "new tax rebate policy"? The EV tax credit doesn't work by owing money. It works by having having enough taxable income to qualify. If you W2 Federal withholding on your pay stub shows $7500 or more, you will qualify for the full tax credit. You can also co own the vehicle to qualify for the credit. Note: Only 1 party qualifies for the credit and also receives it.
In 2024 the tax credit can be applied at the time of sale, which has lead some to believe they can get it without having enough taxable income. The government will "recapture" whatever you don't qualify for and also be subject to a 20% penalty.

It is nicely described in this video.

Interesting, nice overview of the matters at hand, look forward to hearing more if a suit is filed and the results of it. IMHO, there is a narrow spectrum of folks who have modest/nil tax liability and are buying EV's.

That said, how many tax dollars will be lost to the treasury?

I'm guessing someone at Treasury has done a "what if" analysis and came to the conclusion that it would be minimal and approved the variance from the letter of the law.

 

[Txxthie]

Interesting, nice overview of the matters at hand, look forward to hearing more if a suit is filed and the results of it.

IMHO, there is a narrow spectrum of folks who have modest/nil tax liability and are buying an EV's.

That said, how many tax dollars will be lost to the treasury?

I'm guessing someone at Treasury has done a "what if" analysis and came to the conclusion that it would be minimal and approved the variance from the letter of the law.

It's already difficult now for buyers to determine eligibility. The new law doesn't help with that, it only makes it easier to get the money (a dangling carrot). In 2024 EV sales are going to soar if there isn't a good vetting process. This could lead to much sorrow in 2025 for those who owe.

Will dealers still advise buyers to contact a tax professional? So many factors involved, what time of year you buy, what your income was for prior year, whether you are going to make similar income again, whether you lose your job, etc?

It does seem like a recipe for the treasury to lose tax dollars. At least in its current iteration the government isn't giving money away before the fact. 2024 could see the end the IRA.

 

[Roy2001]

It's already difficult now for buyers to determine eligibility. The new law doesn't help with that, it only makes it easier to get the money (a dangling carrot). In 2024 EV sales are going to soar if there isn't a good vetting process. This could lead to much sorrow in 2025 for those who owe.

Will dealers still advise buyers to contact a tax professional? So many factors involved, what time of year you buy, what your income was for prior year, whether you are going to make similar income again, whether you lose your job, etc?

It does seem like a recipe for the treasury to lose tax dollars. At least in its current iteration the government isn't giving money away before the fact. 2024 could see the end the IRA.

The new rule is very very simple and straightforward.

If you are not above the income cap, even if you are not paying Federal income tax, you will get $7500 instant off when you buy a new EV.

In fact, everyone can get that instant rebate, but IRS will chase you for tax defult if your income is above the cap.

 

[TaxmanHog]

The new rule is very very simple and straightforward.

If you are not above the income cap, even if you are not paying Federal income tax, you will get $7500 instant off when you buy a new EV.

In fact, everyone can get that instant rebate, but IRS will chase you for tax default if your income is above the cap.

That's the interpretation I have.

 

[Txxthie]

The new rule is very very simple and straightforward.

If you are not above the income cap, even if you are not paying Federal income tax, you will get $7500 instant off when you buy a new EV.

In fact, everyone can get that instant rebate, but IRS will chase you for tax defult if your income is above the cap.

It’s too simple that is the problem!
Government will also chase you if you don’t have enough tax liability. Many people are going to end up in payment plans in 2025 repaying EV tax credits + possible penalties to the government.

 

[TaxmanHog]

Government will also chase you if you don’t have enough tax liability. Many people are going to end up in payment plans in 2025 repaying EV tax credits + possible penalties to the government.

If the suit against the EXEC BR of the GOVT is successful, yes there is the potential.

You would be surprised how much the IRS writes down on failed business enterprises, makes this issue a piss to the wind.

 

[LightningShow]

Thank you! Looks like the answer is yes.

That's going to be the answer for anything tax related in California. "Do I have to pay more taxes?" Yes.

 

[Oneand0]

I bought a 2016 Ford Edge for zero percent interest for my parents, so it had to be in my name. When I was done paying for it, I had it transferred as the gift that it was and no charge for my parents from DMV. We live in Ca.

 

[FirstF150InCasco]

My son is in college and he could buy an EV with $7500 off next year thanks to new tax rebate policy that he does not need to owe $7500 tax to claim it.

Now my question is, if he is going to buy a Lightning and transfer it to me, do I need to pay tax (again)?

Can you provide more details about the "new" tax rebate policy (where you do not need to owe $7,500 in tax to claim it)? Where / when did this change? Can you provide details (a link would be great.) Thank you.

 

[TaxmanHog]

Can you provide more details about the "new" tax rebate policy (where you do not need to owe $7,500 in tax to claim it)? Where / when did this change? Can you provide details (a link would be great.) Thank you.

See the youtube video in post 15 on this thread.

As well as a detailed discussion in another thread, with this post being a key concern from the IRS FAQ page. https://www.f150lightningforum.com/...ance-for-new-ev-tax-credits.16913/post-340814

 

[FirstF150InCasco]

See the youtube video in post 15 on this thread.

Maybe I'm just not getting it, but the "text" above the video seems to say the opposite:
Quote: "The EV tax credit doesn't work by owing money. It works by having having enough taxable income to qualify. If you W2 Federal withholding on your pay stub shows $7500 or more, you will qualify for the full tax credit." Also, "...some believe they can get it without having enough taxable income. The government will "recapture" whatever you don't qualify for and also be subject to a 20% penalty." My take of this is that you need to have $7,500 in tax liability to get the credit (which is not new.)

 

[TaxmanHog]

Can you provide more details about the "new" tax rebate policy (where you do not need to owe $7,500 in tax to claim it)? Where / when did this change? Can you provide details (a link would be great.) Thank you.

https://www.irs.gov/pub/taxpros/fs-2023-22.pdf

Sponsored