What happens to tax credit if you sell your hybrid?

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Apr 19, 2006 | 10:33 AM

#11

Anahymbrid

Ridiculously Active Enthusiast

Joined: Mar 2006

Posts: 655

From: Anaheim Hills, CA

Re: What happens to tax credit if you sell your hybrid?

I've seen $2,100 and also $3,150 as tax credit numbers listed. Why the difference? How does one qualify for the $3,150? (note: I have an '06 model, purchased in '06).

Apr 19, 2006 | 11:58 AM

#12

clyde2575

Pretty Darn Active Enthusiast

Joined: Mar 2006

Posts: 255

From: Phoenix, AZ

Re: What happens to tax credit if you sell your hybrid?

Quote:

Originally Posted by AZMerf

The credit is still under consideration by the IRS but you can assume there will be some recapture period similar to the deduction. Sorry.

I am not sure why this would be a bad thing. When I traded my '04 in, I assumed that it would be used in the same fashion that I used it in and as per my understanding of the information on the IRS web-site that means that it does not need to be repaid.

If you read it differently, please explain as I may have to pay some of my '04 credit back.

Apr 19, 2006 | 12:24 PM

#13

ElanC

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Joined: Oct 2005

Posts: 700

From: El Cerrito, CA

Re: What happens to tax credit if you sell your hybrid?

Quote:

Originally Posted by Adam_HybridCivic

I believe I read that if you do not keep the car for at least threee years you have to pay the credit back. I believe that it may be pro-rated say you kept it for two years you would only have to pay 1/3 of the deduction back. I believe that its on www.irs.gov

You're confusing between the tax deduction which was in effect till the end of last year, and the tax credit. The old deduction had to be backed out in certain circumstances if you sold the car - only if you knew that the buyer intended to convert it to a non-hybrid (now isn't that stupid?).

The IRS has given no guidance on the 2006 credit, AFAIK.

Apr 19, 2006 | 12:28 PM

#14

ElanC

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Joined: Oct 2005

Posts: 700

From: El Cerrito, CA

Re: What happens to tax credit if you sell your hybrid?

Quote:

Originally Posted by Anahymbrid

How does one qualify for the $3,150?

Buy a Prius.

Apr 19, 2006 | 06:15 PM

#15

DTDRIVER

Active Enthusiast

Joined: Apr 2005

Posts: 147

Re: What happens to tax credit if you sell your hybrid?

Quote:

Originally Posted by ElanC

Buy a Prius.

Yeah, buy a Prius with the exorbanant options that run them up to $29K to get same options as a $24K HCHII. And to top it off with a Prius you get a glorified ugly golf cart as opposed to a sedan car in the Honda.

Apr 19, 2006 | 06:32 PM

#16

AZMerf

Ridiculously Active Enthusiast

Joined: Jun 2004

Posts: 550

From: Phoenix, Arizona

Re: What happens to tax credit if you sell your hybrid?

Quote:

Originally Posted by clyde2575

That is such as stupid line in the regulation that it does not make sense to me ... which is why I don't trust it. What, are they going to turn it into a toaster?