- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I'm running into an issue with this form and it's costing me some time. Hopefully someone that dealt with a similar situation can shed some light.
A client bought a Tesla Model Y last year. They were given the $7500 credit upfront and it was transferred to the dealer. To my understanding, they still need to report the transaction on form 8936 with the vehicle information, credit transferred and the amount of the transfer. I did all this, but it's coming up with a credit limitation of $4000. This is a new vehicle bought in cash. The client is rightfully worried that if reported as-is, they will have to pay back the remainder of $3500. Is this correct or am I missing something?
If relevant, AGI is $95913 and files has HOH.
Help!
Best Answer Click here
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I have it checked as a new vehicle. The limitation remains.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
It is a nonrefundable credit. Is your clients tax liability limiting the credit
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
That's an interesting point. The total tax is roughly $4400, so if that were the case would the credit not be limited at $4400? I also tried putting the form on their partner's return as they bought the car in both of their names, although the clean vehicle seller report is in his name (they are an unmarried couple). The partner's total tax is over 30k and her limitation is still $4000. I feel like I must be missing something either with the software or the nature of the credit itself. I will paste a couple screenshots to illustrate what's happening. Was there a recent update with this form or something?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Are you looking at line 16? That is a pre-printed number on the form, and has nothing to do with the actual credit.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I'm confused, doesn't that mean had they not transferred the credit, all they would be eligible for is $4000? Or that line is meaningless because they transferred it?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
@ejdtaxman wrote:
I'm confused, doesn't that mean had they not transferred the credit, all they would be eligible for is $4000? Or that line is meaningless because they transferred it?
No, it does not mean that.
That is in a completely different section than the $7500 credit.
As I said before, it is a pre-printed number on the blank IRS form.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Thanks for setting my mind at ease. I was going crazy.