PeakOil is You
THE Hybrid Transportation Thread pt 2(merged)
Re: The Hybrid Tax Credit Bait and Switch
by fletch961 » Fri 09 Feb 2007, 09:58:18
$this->bbcode_second_pass_quote('', 'P')ut up or shut up. Post a direct link to the IRS web page that outlines the methodology by which the hybrid tax credit is applied.
Direct quote from IRS web page: "Also, if you claim the credit as a personal credit, the tax code limits the amount of the credit that you may claim to the amount of your regular tax liability. Therefore, if your regular tax liability is zero, the amount of the credit for which you are eligible will be zero. The credit cannot be used to reduce your regular tax liability below zero, and cannot be carried forward or back to another taxable year. " IRS
Of course that page was only available since January of this year. However with only a little searching I was able to find that the information was contained in Subsection 30B of the IRC. In a couple more minutes I was able to find the following in 30B.
$this->bbcode_second_pass_quote('', 'â')€˜â€˜(g) APPLICATION WITH OTHER CREDITS.—
‘‘(1) BUSINESS CREDIT TREATED AS PART OF GENERAL BUSINESS
CREDIT.—So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).
‘‘(2) PERSONAL CREDIT.—The credit allowed under subsection (a) (after the application of paragraph (1)) for any taxable year shall not exceed the excess (if any) of—
‘‘(A) the regular tax reduced by the sum of the credits allowable under sub part A and sections 27 and 30, over
‘‘(B) the tentative minimum tax for the taxable year.
In other words the Hybrid Tax Credit is applied after sub-part A, Section 27, and section 30. Sub-part A - "Non-refundable personal credits" includes the Child Tax Credit, Adoption, Education, etc.
Section 27 is the Foreign Tax Credit
Section 30 is a credit for electric vehicles
You know all the tax credits that came before line 55 on your 1040.
Subsection 30B of the IRC was contained in its entirety in section 1341 of the Energy Policy Act of 2005 signed on August 8, 2005. So, I'm sorry the information was available.
Have you ever heard the saying about not buying a new car model in its first year of production because they tend to have issues. Well don't try out a new tax credit its first year out either.
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fletch961 - Peat
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Re: The Hybrid Tax Credit Bait and Switch
by snax » Sat 10 Feb 2007, 12:19:52
$this->bbcode_second_pass_quote('fletch961', 'H')ave you ever heard the saying about not buying a new car model in its first year of production because they tend to have issues. Well don't try out a new tax credit its first year out either.
And that is the meat of it fletch. Thanks.
Regardless of what it may seem, my intent in starting this thread was to get the information out there. I don't want others duped into purchasing a hybrid because they are as ignorant as myself, and dare I say, probably the majority of the population, on how the IRS tax code works.
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Re: The Hybrid Tax Credit Bait and Switch
by fletch961 » Sat 10 Feb 2007, 23:57:25
$this->bbcode_second_pass_quote('', 'O')f course, I'll maintain that very few tax payers out there will be in your boat.
Why? Because most people who buy a 25k car actually owe tax and can benefit from the credit.
Why? Because most people who buy a 25k car actually owe tax and can benefit from the credit.
Actually, as was looking it up, I found out that those who are on the alternative minimum tax (AMT) do not get this credit. Those people make more than enough to buy 25k cars, but than again if they are on the AMT they don't need any government help buying a car.
The AMT, for those who don't know, is a separate formula for calculating ones tax liability. It strips out most deductions and credits, but uses a lower tax rate. You have to pay the higher of the AMT or the regular income tax. People with high income and a lot of deductions get hit with this tax. The upper-middle class.
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