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Looks very clear to me. If you purchased a vehicle on the 16th, you're fine. If you purchased after the 16th, you would have had to have a binding agreement in place before the 15th. Those are two separate ideas with different dates.

Of course, the IRS changed "treat such vehicle as having been placed in service on the day before the date of enactment" to "the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply", which is very different.
Yeah but I’m not sure, because if you have a binding contract put into place on the day of enactment(August 16th), then that contract was established prior to “immediately after enactment of the Inflation Reduction Act(after August 16, 2022)”.
If the contract was established before the new rule, do you really think upcoming guidance will enforce that rule on that contract? I think as long as the vehicle is delivered by December 31, 2022 it may still qualify.
 

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Yeah but I’m not sure, because if you have a binding contract put into place on the day of enactment(August 16th), then that contract was established prior to “immediately after enactment of the Inflation Reduction Act(after August 16, 2022)”.
If the contract was established before the new rule, do you really think upcoming guidance will enforce that rule on that contract? I think as long as the vehicle is delivered by December 31, 2022 it may still qualify.
It's clear in the bill that the Transition Rule applies for purchases or binding contracts to purchase before the date of enactment. So August 16 was too late.
 

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It's clear in the bill that the Transition Rule applies for purchases or binding contracts to purchase before the date of enactment. So August 16 was too late.
It also says two more things with I would say equal clarity:
1). If you buy a vehicle after August 16th and before January 1st, the only new rule in effect is the final assembly rule, and the rest take effect January 1st; and
2). The final assembly rule commences immediately after the date of enactment of the act.

therefore, I believe written binding contract for solterra dated 16th will qualify, but any date 17th or laterwill not qualify.
I think we will need to await further clarification and guidance from IRS to know for sure.

all that assuming the solterra is delivered by December 31st.
 

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It also says two more things with I would say equal clarity:
1). If you buy a vehicle after August 16th and before January 1st, the only new rule in effect is the final assembly rule, and the rest take effect January 1st; and
2). The final assembly rule commences immediately after the date of enactment of the act.

therefore, I believe written binding contract for solterra dated 16th will qualify, but any date 17th or laterwill not qualify.
I think we will need to await further clarification and guidance from IRS to know for sure.

all that assuming the solterra is delivered by December 31st.
Again (last time!), there's no debate that the new rule takes effect after the date of enactment. Equally clearly, it is stated that the binding contract needs to be in place before the DATE of enactment. Plus, at this point, it doesn't matter if it's delivered before or after 12/31/2022 because the binding contract allows your transaction to either (1-if you believe the IRS) occur under ALL of the old rules or (2-if you believe the text of the bill) be treated as though the vehicle was place in service on the day before the date of enactment. There's no currently documented end date for the Transition Rule.

I'm not trying to convince you at this point, but I would encourage anyone else who is unsure this to read through the IRS guidance and the text of the bill if this is important to them. (The few people who got a binding agreement on 8/16.) And, it's possible something will be updated/changed, but that's where it stands now.
 

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Again (last time!), there's no debate that the new rule takes effect after the date of enactment. Equally clearly, it is stated that the binding contract needs to be in place before the DATE of enactment. Plus, at this point, it doesn't matter if it's delivered before or after 12/31/2022 because the binding contract allows your transaction to either (1-if you believe the IRS) occur under ALL of the old rules or (2-if you believe the text of the bill) be treated as though the vehicle was place in service on the day before the date of enactment. There's no currently documented end date for the Transition Rule.

I'm not trying to convince you at this point, but I would encourage anyone else who is unsure this to read through the IRS guidance and the text of the bill if this is important to them. (The few people who got a binding agreement on 8/16.) And, it's possible something will be updated/changed, but that's where it stands now.
If you have a written binding contract dated the same date as the date of enactment, you are saying you’re SOL. We’re kind of going in circles here, but it’s a complex idea. From the IRS guidance:


Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.”

now, you can see that if your written binding contract is dated August 16th, it must fall into this above category of “Vehicles Purchased Between August 16th and December 31st,2022.”

The guidance says that in this case, all the old rules apply and starting August 17 the final assembly rule applies as well.

Thetefore logically a written binding contract dated August 16th will qualify, if vehicle is delivered by December 31, 2022.

sure, you’re written binding contract must be dated 8/15/2022 or earlier to qualify for the guidance category of “Transition Rule for Vehicles Purchased before August 16, 2022” but that doesn’t change the fact that logically 8/16/2022 will qualify based on the other guidance category I mentioned.
 

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The thing is, the written binding contract by definition makes the date of purchase be the date of the written binding contract. Date of delivery is different than date of purchase.

date and time of written binding contract =
Date and time of purchase

date car is handed over from dealer to buyer =
Date of delivery
 

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If you have a written binding contract dated the same date as the date of enactment, you are saying you’re SOL. We’re kind of going in circles here, but it’s a complex idea. From the IRS guidance:


Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.”

now, you can see that if your written binding contract is dated August 16th, it must fall into this above category of “Vehicles Purchased Between August 16th and December 31st,2022.”

The guidance says that in this case, all the old rules apply and starting August 17 the final assembly rule applies as well.

Thetefore logically a written binding contract dated August 16th will qualify, if vehicle is delivered by December 31, 2022.

sure, you’re written binding contract must be dated 8/15/2022 or earlier to qualify for the guidance category of “Transition Rule for Vehicles Purchased before August 16, 2022” but that doesn’t change the fact that logically 8/16/2022 will qualify based on the other guidance category I mentioned.
No. The Act itself says it has to be before the date of enactment. I'm positive the IRS meant to say "on or" after August 16 and before January 1 regarding the old rules and cars made in NA., which is required to be consistent with the actual Act passed by Congress. Sorry to disappoint anyone, but I'm afraid Aug 16 purchases (or binding contracts to purchase) are SOL.
 

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auguest 16th purchase or binding contract would be subject to all old provisions, AND not subject to final assembly provision. So on what basis do you say they would be SOL?

it says right there if you are correct that they meant “on or after” august 16th that purchases between Aug 16 - dec 31 are subject to all the rules with the addition of the new final assembly provision.

it also says the new final assembly provision doesn’t kick in until August 17th.

so again, on what basis would a buyer who signs binding contract on August 16th and takes delivery by New Year’s Eve be SOL?
 

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Again (last time!), there's no debate that the new rule takes effect after the date of enactment. Equally clearly, it is stated that the binding contract needs to be in place before the DATE of enactment. Plus, at this point, it doesn't matter if it's delivered before or after 12/31/2022 because the binding contract allows your transaction to either (1-if you believe the IRS) occur under ALL of the old rules or (2-if you believe the text of the bill) be treated as though the vehicle was place in service on the day before the date of enactment. There's no currently documented end date for the Transition Rule.
Please see the final assembly section here which states the rule applies AFTER August 16th, like I’ve been trying to say to you.

“(k) Effective Dates.--
(1) In general.--Except as provided in paragraphs (2), (3),
(4), and (5), the amendments made by this section shall apply to
vehicles placed in service after December 31, 2022.
(2) Final assembly.--The amendments made by subsection (b)
shall apply to vehicles sold after the date of enactment of this
Act.
(3) Per vehicle dollar limitation and related requirements.--
The amendments made by subsections (a) and (e) shall apply to
vehicles placed in service after the date on which the proposed
guidance described in paragraph (3)(B) of section 30D(e) of the
Internal Revenue Code of 1986 (as added by subsection (e)) is
issued by the Secretary of the Treasury (or the Secretary's
delegate).
(4) Transfer of credit.--The amendments made by subsection (g)
shall apply to vehicles placed in service after December 31, 2023.
(5) Elimination of manufacturer limitation.--The amendment made
by subsection (d) shall apply to vehicles sold after December 31,
2022.
(l) Transition Rule.--Solely for purposes of the application of
section 30D of the Internal Revenue Code of 1986, in the case of a
taxpayer that--
(1) after December 31, 2021, and before the date of enactment
of this Act, purchased, or entered into a written binding contract
to purchase, a new qualified plug-in electric drive motor vehicle
(as defined in section 30D(d)(1) of the Internal Revenue Code of
1986, as in effect on the day before the date of enactment of this
Act), and
(2) placed such vehicle in service on or after the date of
enactment of this Act,
such taxpayer may elect (at such time, and in such form and manner, as
the Secretary of the Treasury, or the Secretary's delegate, may
prescribe) to treat such vehicle as having been placed in service on
the day before the date of enactment of this Act.”
 

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auguest 16th purchase or binding contract would be subject to all old provisions, AND not subject to final assembly provision. So on what basis do you say they would be SOL?

it says right there if you are correct that they meant “on or after” august 16th that purchases between Aug 16 - dec 31 are subject to all the rules with the addition of the new final assembly provision.

it also says the new final assembly provision doesn’t kick in until August 17th.

so again, on what basis would a buyer who signs binding contract on August 16th and takes delivery by New Year’s Eve be SOL?
The language in the bill is clear that if you place the vehicle into service on or after the date of enactment, the transition rule only applies if you purchased or have a binding contract to purchase before the date of enactment. Verbatim:

(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—

(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue
Code of 1986, as in effect on the day before the date
of enactment of this Act), and

(2) placed such vehicle in service on or after the
date of enactment of this Act,
such taxpayer may elect (at such time, and in such form
and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as
having been placed in service on the day before the date
of enactment of this Act.
 

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Will you agree the final assembly rule takes effect August 17th?

will you agree that the preliminary guidance says vehicles purchased and delivered within the window of time from august 16- dec 31 are subject to the previous rules?

Additionally to the old rules, the only new rule that kicks in before January 1, 2023 is the Final Assembly Rule which kicks in on August 17th.

I’m pretty sure that’s correct in spite of what other folks are saying. So yes, reader, do your own homework.
 

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In the end, the rules will be what the Treasury Department/IRS finalizes and publishes, and that’s going to be a while coming. Everyone is entitled to their own opinion and interpretation of the law, but in the end, we all know which opinion will win out… the IRS version…

My opinion… One would have to be an idiot to rely upon tax filing advice from an Internet car forum…I can only imagine “I got my tax filing information from reading a car forum” being used at an audit!
 

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Will you agree the final assembly rule takes effect August 17th?

will you agree that the preliminary guidance says vehicles purchased and delivered within the window of time from august 16- dec 31 are subject to the previous rules?

Additionally to the old rules, the only new rule that kicks in before January 1, 2023 is the Final Assembly Rule which kicks in on August 17th.

I’m pretty sure that’s correct in spite of what other folks are saying. So yes, reader, do your own homework.
You’re confusing the written binding contract with an actual sale/date of purchase. They aren’t the same thing. The written binding contract is a part of the transition rules and required the day before enactment or earlier. The final assembly rule takes effect after the date of enactment and is tied to the date of sale/delivery and not to the date of the written binding contract.
 

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You may be correct that date of purchase is defined as when the last dollar is paid. But it may be possible that since a written binding contract requires a significant partial payment, that the date of purchase may be dated on that first partial payment.
 

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You may be correct that date of purchase is defined as when the last dollar is paid. But it may be possible that since a written binding contract requires a significant partial payment, that the date of purchase may be dated on that first partial payment.
The IRS isn't really super flexible on ideas like that. They use the phrase "placed in service" rather than purchased, paid, sold, delivered, etc. And I'm sure they have a specific definition for it, but it's pretty simple to determine in most cases.
 

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It's ridiculous that we are all placed in the position of trying to make sense of the ambiguous guidance that has been provided thus far. I'm following the advice to contact our members of congress. Below is the letter I've sent to my Senators.

Dear Senator,

I’m writing to make you intimately aware of a situation that I and thousands of other Americans are suddenly facing as a result of the Inflation Reduction Act (IRA) as it relates to electric vehicle purchases.

To convey this issue, I will use the specific example of the Subaru Solterra, which I and approximately 6,000 other US customers were in the process of purchasing at the time the IRA was signed into law.

US customers such as myself had the opportunity to reserve an allotted 6,000 Solterras during a short window in February 2022. Subaru then released pricing and began having US dealers contact reservation customers in April 2022 so we could order the specific vehicles we wanted (color, trim level, etc.). Customers were then provided approximate delivery dates in August/September 2022.

As you can see, these thousands of customers and I have six months invested in this process. While I can not speak for everyone, I do know that I and many others were depending on the previously existing $7,500 tax credit, which the Subaru Solterra qualified for, to be a component of this purchase. It was undoubtedly a factor in the decision for many of us to purchase this specific vehicle.

So here we all are, after many months of working and planning to purchase the Subaru Solterra and the IRA is passed, IMMEDIATELY DISQUALIFYING the Subaru Solterra for a tax credit due to its assembly origin. Yes, there is a Transition Rule that MIGHT allow buyers such as us to qualify for the previous tax credit, but the language regarding “binding agreements” is ambiguous and confusing.

In a nutshell, me and thousands of other people are in the middle of a purchase we are no longer sure qualifies for a tax credit. Furthermore, some of us may be subject to losing deposit money if we don’t proceed with our purchases.

Senator, please do everything in your power to see to it that I and the thousands of US customers in my position can EASILY qualify for the previous tax credit. We should not be faced with such uncertainty simply because Congress passed a bill while we were in the middle of a vehicle purchase. Especially when that vehicle purchase helps reduce costs to the environment and negative health consequences to other Americans.

Please keep in mind, this is the tale of just one model of EV. There are thousands of additional buyers that were in the process of purchasing other makes and models who now find themselves in the same confusing and stressful situation.

Thank you in advance for your assistance with this matter.
Sincerely,
 

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My good friend is a CPA and partner in his firm. He got the following information this week. It looks like the IRS is going to adhere to the 5%. Not looking good for anyone that got any sort of written contract and/or deposit for August 16th without putting down at least 5%. He said that's what he and his firm will be advising their clients and it would be a $7,500 gamble if clients decided to try to proceed.

Font Terrestrial plant Screenshot Number Document
 

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My good friend is a CPA and partner in his firm. He got the following information this week. It looks like the IRS is going to adhere to the 5%. Not looking good for anyone that got any sort of written contract and/or deposit for August 16th without putting down at least 5%. He said that's what he and his firm will be advising their clients and it would be a $7,500 gamble if clients decided to try to proceed.
"You need a binding contract, but we won't tell you what a binding contract is until it's too late to get one"

Makes sense
 

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Not only that, but even had that information been widely known, only an extreme few dealerships seem willing to engage in such a contract… the forums on EVs have lots of examples of dealerships refusing to do so.

So, it’s a bit like winning the billion $ lotto, but being paid in a non-recognized currency that no one will accept…
 
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