- #855 of 1765
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Re: $2000 Tax Credit [john1701a]
by larsb
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Jul 22, 2004 (8:41 am)
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Replying to: john1701a (Jul 22, 2004 8:00 am)
Actually, I'm not sure that part about the requirement of owning the car for three years is necessarily factual.
For example, for the people who took a $2000 deduction for the 2003 tax year, meaning they purchased a qualified vehicle before 12/31/2003, and then the car is totalled in January 2004 - are they then required to file an AMENDED return saying, "actually, I did not buy or use a qualified hybrid vehicle in 2003" ???
I'm looking on the IRS site to confirm, but I don't think "how long you have the car" is applicable. I may be wrong, but I doubt it....
Lars Bogart
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- #856 of 1765
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Re: $2000 Tax Credit [larsb]
by larsb
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Jul 22, 2004 (8:55 am)
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Replying to: larsb (Jul 22, 2004 8:41 am)
OK I found the text in an IRS publication, Pub 535, "Business Expenses" chapter 12 page 47. Here it is verbatim:
"Sales or other dispositions. If you sell of otherwise dispose of the vehicle within 3 years after the date you placed it in service and know or have reason to know that it will be changed in any of the ways above, you are subject to recapture rules. In other dispositions (including a disposition by reason of an accident or other casualty), the recapture rules do not apply."
So, translated, that means that if you lose the car to an accident, you are not required to return the credit that you have taken in a previous year. So the three year rule applies for AFTER you have taken a deduction the first time.
What is DOES NOT SPECIFY is what is done if the car is lost to accident BEFORE you have taken a deduction at all.
That's where a tax expert could come in handy, because the still unanswered question is "do I get the first deduction in year one if I do not end the year with possession of the car?"
Lars
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- #857 of 1765
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Re: $2000 Tax Credit [larsb]
by oranu
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Jul 22, 2004 (10:37 am)
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Replying to: larsb (Jul 22, 2004 8:55 am)
Wow! You folks are very helpful. Having not yet filed my 2003 return, it seems to me that the thing to do is to Xerox the title before turning ownership over to the insurance company, then file my 2003 return with the deduction claimed (as I owned and used the car from circa February, 2003 until the accident in May, 2004).
Comments?
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- #858 of 1765
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Re: $2000 Tax Credit [oranu]
by larsb
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Jul 22, 2004 (12:30 pm)
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Replying to: oranu (Jul 22, 2004 10:37 am)
That sounds like a legally sound strategy to me. Because in fact, you DID have ownership of the vehicle on 12/31/03, which is when the tax year ends. Good luck.........
Lars
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- #859 of 1765
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Re: $2000 Tax Credit [john1701a]
by gagrice
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Jul 22, 2004 (12:52 pm)
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Replying to: john1701a (Jul 22, 2004 8:00 am)
That bill is still in Congress it was sponsored by Rep. Dave Camp, R-Midland, in 2001. They have whittled the incentives down to save money. It has nothing to do with the Administration. The only tax credits I know of are on all electric cars. So you can buy a golf cart and use it to go get groceries. Maybe it will get passed yet this session. In time for the huge influx of hybrids and diesel cars.
http://www.detnews.com/2003/business/0311/18/c01-328385.htm
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- #860 of 1765
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Re: $2000 Tax Credit [gagrice]
by john1701a
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Jul 22, 2004 (1:56 pm)
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Replying to: gagrice (Jul 22, 2004 12:52 pm)
Actually, there were several. There was a tax CREDIT that got dropped. And there was the renewal of the existing DEDUCTION that was allowed to sunset.
And yes, the current administration was involved with those.
JOHN
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- #861 of 1765
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Re: $2000 Tax Credit [john1701a]
by misterme
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Jul 22, 2004 (3:48 pm)
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Replying to: john1701a (Jul 22, 2004 1:56 pm)
"And yes, the current administration was involved with those"
John, are you looking for a good political debate?
I would suggest that this forum is not the place for political topics or jabs, especially given the election year and firey potential.
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- #862 of 1765
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Let's stay away from politics
by Sylvia STAFF
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Jul 22, 2004 (8:06 pm)
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it's a slippery slope...
Thanks
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- #863 of 1765
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Synthetic Tranny Fluid for 5-speed 2004 HCH
by larsb
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Jul 23, 2004 (11:45 am)
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Has anyone replaced their own tranny fluid? If so or even if not,
does anyone know the capacity of the tranny case, i.e. how much fluid
I need to buy to refill it if I drain it myself?
Thanks...
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- #864 of 1765
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Re: some answers, some agreements [spdracr]
by stevecheme
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Jul 30, 2004 (2:07 pm)
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Replying to: spdracr (Jul 16, 2004 11:12 pm)
This is a warning to all considering a hybrid car. If you are into hybrids purely for green reasons that's wonderful. But if you think you will save money, you may be deluding yourself. You must consider overall cost of ownership. The Honda Civic is a wonderful model to illustrate this because it comes from a conventional power-train family. So if we assume a first owner service life of 100,000 miles, then the 10 mpg boost in efficiency from 32mpg for standard to 42mpg from hybrid, you will save only 744 gallons of gas over this owners useful service. Gasoline prices are unpredictable, but baring a Middle-East war we are not going to see more than $3.00/gallon in next 5 years. So savings on fuel is about $2231 maximum. Since this trickles in over time, if you do a time value of money adjustment the future savings is probably only worth about $1800 in your pocket now (net present value). With the 2000 tax deduction (not credit) you will save 2000 times your tax rate (let us say 30% bracket) So we have a typical savings of 600 bucks at tax time and $1800 fuel savings for a total of $2400. Now lets be honest and compare the creature comfort/performance of the HCH with its siblings. You will be forced to admit it is fare less desirable than its top of the line Civic siblings. So what your get is typical of the low end of the Civic line which is valued at fare less than the HCH price less $2400 savings. Now add in the more expensive maintenance, maintenance only by HONDA, more fragile technology. And the highest risk of all, those high cycling batteries are not going to last the full 100,000 miles and they won't be cheap to replace! Enjoy the green on the trees because it ain't going to be in your wallet when your done. But I am glad someone is doing the field research.
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