# Question regarding diesel tax credit



## Stussy109 (May 23, 2010)

I recently agreed to purchase a 2011 X5D, however the one they thought they had in stock at another sister dealership in MD was actually already spoken for. The dealer than said the had a production slot slated to start next week and i should have the vehicle by mid-late january 2011. Now with the $1800 diesel tax credit set to expire come Jan 1st 2011, the salesman says I'm locked in for the credit, however i'm not too confident I am, can anybody chime in? :dunno:


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## TDIwyse (Sep 17, 2010)

http://www.irs.gov/publications/p17/ch37.html

"You may be able to take a credit if you place an alternative motor vehicle in service in 2010."

Seems like you need to have bought it and taken delivery before the end of the year in order to qualify for the credit. But I could be wrong . . .


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## Stussy109 (May 23, 2010)

Still looks confusing


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## Snipe656 (Oct 22, 2009)

Could just gamble they(government) will add it again next year then take the credit on your 2011 taxes. Otherwise I'd talk to a CPA to see what their interpretation of it is but I really doubt technically buying a car in 2011 they would think you could use a tax credit for 2010.


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## KOPrice121 (Oct 17, 2005)

Stussy109 said:


> I recently agreed to purchase a 2011 X5D, however the one they thought they had in stock at another sister dealership in MD was actually already spoken for. The dealer than said the had a production slot slated to start next week and i should have the vehicle by mid-late january 2011. Now with the $1800 diesel tax credit set to expire come Jan 1st 2011, the salesman says I'm locked in for the credit, however i'm not too confident I am, can anybody chime in? :dunno:


Taking tax advice from a car salesman is NEVER good practice.

You really need to check with your accountant. Personally, I read the tax credit language as saying the vehicle must be in service during 2010. A January delivery fails to meet that test. Just my two cents! Good luck ...


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## Penguin (Aug 31, 2003)

Legally the car must be put into service by the end of this year, not simply purchased.

What you actually report on your tax return is up to you, but if the "in service" date is after December 31, 2010, you will not get the credit. The law and IRS instructions are quite clear on the point.


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## beemer01 (Aug 12, 2010)

My accountant said that the credit can be taken on the 2011 taxes if the car is placed in service in 2011. The wording from the IRS form is:

"The vehicle must be placed in service by the taxpayer after December 31, 2005 and must be purchased on or before December 31, 2010. "

Note that there are 2 dates. The placed in service date doesn't have an end date. The purchase date must be before the end of the year. The tax form uses the placed in service date, so you can only take the credit for the year the car was placed into service.


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## anE934fun (May 10, 2008)

KOPrice121 said:


> *Taking tax advice from a car salesman is NEVER good practice.
> 
> You really need to check with your accountant.* Personally, I read the tax credit language as saying *the vehicle must be in service during 2010. A January delivery fails to meet that test.* Just my two cents!  Good luck ...


+1. Although I am not an accountant. But I did stay at a Holiday Inn recently. :dunno:


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## Penguin (Aug 31, 2003)

beemer01 said:


> My accountant said that the credit can be taken on the 2011 taxes if the car is placed in service in 2011. The wording from the IRS form is:
> 
> "The vehicle must be placed in service by the taxpayer after December 31, 2005 and must be purchased on or before December 31, 2010. "
> 
> Note that there are 2 dates. The placed in service date doesn't have an end date. The purchase date must be before the end of the year. The tax form uses the placed in service date, so you can only take the credit for the year the car was placed into service.


Be sure to let us know how this works out. The fact is, your accountant is wrong. Since the tax credit expires January 1, 2011, there will be no form 8910 with which to claim the credit in the 2011 tax forms.

But if your tax accountant says you can claim it on your 2011 taxes, you should get him to put it in writing... maybe he will give you a discount when you file your 2011 taxes and he discovers there is no way to claim it.

P.S. I do not know if the final 8910 form is available for the 2010 tax year, but if the requirements are as you stated above (purchase date before the end of the year), it is possible the IRS could change the form to use purchase date, rather than service date, so that you can get the credit for 2010 based on purchase date. But I see no way that there will be a credit available for a 2010 tax return for people using the standard Jan 31 - Dec 31 tax year.


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## beemer01 (Aug 12, 2010)

Penguin said:


> Be sure to let us know how this works out. The fact is, your accountant is wrong. Since the tax credit expires January 1, 2011, there will be no form 8910 with which to claim the credit in the 2011 tax forms.
> 
> But if your tax accountant says you can claim it on your 2011 taxes, you should get him to put it in writing... maybe he will give you a discount when you file your 2011 taxes and he discovers there is no way to claim it.
> 
> P.S. I do not know if the final 8910 form is available for the 2010 tax year, but if the requirements are as you stated above (purchase date before the end of the year), it is possible the IRS could change the form to use purchase date, rather than service date, so that you can get the credit for 2010 based on purchase date. But I see no way that there will be a credit available for a 2010 tax return for people using the standard Jan 31 - Dec 31 tax year.


My accountant checked with the IRS and said that was the way it was supposed to work. I will ask to get in writing to make sure though. 

I did a quick search, and one of the hybrid forums said the same thing:
"Remember that there are two qualifying dates---purchase date (an order qualifies as purchase) and an in-service date. The first one determines the amount of tax credit and the next the year in which it may be claimed."


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## Penguin (Aug 31, 2003)

beemer01 said:


> My accountant checked with the IRS and said that was the way it was supposed to work.


If he checked with the IRS, he is better than 98% of the tax accountants I have known, and is probably right and my interpretation is likely in error. Although the IRS has been know to provide inaccurate information quite frequently, it's the best one can do, without actually getting a Private Letter Ruling, which would be inappropriate in a case like this.

It is interesting that the IRS will have a 2011 Form 8910 just for people who purchased a qualifying vehicle in 2010, but put it into service in 2011. But the IRS has done many stranger things.


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## Stussy109 (May 23, 2010)

After double checking with the dealership sales manager, the car had to be delivered by the end of December in order to qualify for the credit. I canceled the order, and scoured the internet for hours. I found an identically built X5 at prestge bmw in north jersey with the exception it had black interior instead of tobacco brown. Took delivery of the vehicle yesterday after we agreed on a price over phone/fax.After she was freshly detailed, drove through slushy salt covered roads 2 hrs home...


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## Stussy109 (May 23, 2010)

officially the proud owner of an 09 335D, and an 11 X5D...you can tell I love these engines.


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## MrBonus (Jun 26, 2010)

Penguin said:


> If he checked with the IRS, he is better than 98% of the tax accountants I have known, and is probably right and my interpretation is likely in error. Although the IRS has been know to provide inaccurate information quite frequently, it's the best one can do, without actually getting a Private Letter Ruling, which would be inappropriate in a case like this.
> 
> It is interesting that the IRS will have a 2011 Form 8910 just for people who purchased a qualifying vehicle in 2010, but put it into service in 2011. But the IRS has done many stranger things.


They're most likely expecting an extension of the provision for 2011.


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## TDIwyse (Sep 17, 2010)

Stussy109 said:


> officially the proud owner of an 09 335D, and an 11 X5D...you can tell I love these engines.


Nice! Santa must have thought you were very good this year


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