Used Clean Vehicle Credit Beginning Jan. 1, 2023, the purchaser of a qualified used EV or FCV from a licensed dealer for $25,000 or less may be eligible for a tax credit equal to 30% of the purchase price with a maximum of $4,000. The vehicle must be purchased for use and not for resale. The vehicle must be at least two years old, weigh less than 14,000 pounds and have a battery capacity of at least seven kilowatt hours. High-income taxpayers will not qualify for the credit. Seller Reporting In order for vehicles to qualify for the new or used clean vehicle credits, sellers must meet certain reporting requirements. Sellers must furnish a report to the buyer at the time of sale and to the IRS that includes information such as dealer name, address, VIN, make, model, placed in service date and maximum credit. The reports for 2023 are due to the IRS by Jan. 15, 2024. Beginning Jan. 1, 2024, dealers must register with IRS Energy Credits Online in order to be able to submit the time of sale reports. The reports are due to the IRS no later than three calendar days from the date of sale. Advance Payments of Buyer Clean Vehicle Credits to Dealers Eligible buyers will also be able to elect to transfer the tax credit to the dealer beginning Jan. 1, 2024. Dealers must register to be able to submit the claims for advance payment. The advance payment request will be submitted with the time of sale report. The IRS intends to pay the advance payment claims to the dealers within 72 hours of the date when the time of sale report is submitted. Buyers, not dealers, would be responsible if the IRS determines that the buyer does not qualify. Businesses that acquire an EV or FCV may be eligible for a commercial clean vehicle credit with a maximum of $7,500 for vehicles under 14,000 pounds or $40,000 for all other vehicles. Plug-in electric vehicles under 14,000 pounds must have a battery capacity of at least seven-kilowatt hours, while those weighing 14,000 pounds or more must have a battery capacity of at least 15 kilowatt hours. The vehicles must be acquired for business use or lease (not for resale) and the vehicles must be depreciated. The credit would reduce the depreciable basis of the vehicle. There is no limit on the number of credits, but they are non-refundable. To read CBM’s full year-end tax bulletin, scan the QR code or call (301) 986-0600. https://www.cbmcpa.com/industries/automotivedealerships/2023-year-end-tax-bulletin-virginiaautomotive-dealerships/ Tax Planning and Preparation Cost Segregation Analysis Mergers and Acquisitions Audits, Reviews and Compilations Business Process Review Succession Planning About Us Councilor, Buchanan & Mitchell (CBM) has an experienced team of tax, personal financial planning and advisory professionals devoted to the automotive retail industry. Since 1921, we have specialized in new vehicle and heavy truck dealerships, as well as motorcycle and RV dealerships. Investment management, financial planning and retirement planning services are provided by May Barnhard Investments, a subsidiary of CBM. John R. Comunale, CPA Partner | Director of Automotive Dealership Services JComunale@cbmcpa.com Keith A. Laudenberger, CPA Partner | Director of Automotive Dealership Services KLaudenberger@cbmcpa.com our CPAs and advisors have been driving automotive dealership success. 301.986.0600 Councilor, Buchanan & Mitchell, P.C. CPAs & Business Advisors 7910 Woodmont Ave, Suite 500, Bethesda, MD 20814 https://www.cbmcpa.com For more than 100 years, Our Expertise LIFO Inventory Fraud Prevention Business Valuations Financial Planning Investment Management Services Retirement Planning vada.com 17
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