Cash for Clunkers Rebates Taxable!

[velkly]

Link from Drudge Report:

http://www.keloland.com/NewsDetail6162.cfm?Id=0,89084

The Cash For Clunkers program is adding to the activity at treasurers' offices all around South Dakota. First, people were asking for proof of ownership, so they could show they owned their vehicle for a full year, allowing them to cash it in. Now, they'll be returning to register their new vehicle. And when they do, new owners need to bring every bit of paperwork provided to them by their dealer.

"That means they need their title, their damage disclosure, their bill of sale and the dealers have 30 days to get that to them," Minnehaha County Treasurer Pam Nelson said.

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.

For now, the biggest impact of the program hasn't hit this office yet, as most of the paperwork is still in the hands of the dealers. But Nelson expects to see move activity in her office in the next month.

"I'm anxious to see what it's going to be like. I have no idea how many people we're going to see. Hopefully the dealers can process their paperwork in 30 days," Nelson said.

And that's when the line at this office will give some indication of how many cars the government program moved off of local lots.

Nelson adds that if you did recently purchase a vehicle, ensure your dealer gets you the paperwork in time because if they don't you could pay extra interest and penalties.

[Gunfighter04]

Probably a Capital gain, so you too can help invest in the economy

[Ihatemyglock]

Obama giveth and Obama taketh away.

Ramen

[addicted2freedom]

Wonder if the same is true for the $8k tax credit for first time home owners.

My assumption is that a tax credit can't be taxed....

[camper]

My assumption is that a tax credit can't be taxed....

This is true. Unless they changed the rules, credits are the best things you can get because they reduce your taxes dollar for dollar.

camper

[FNG19]

Wonder if the same is true for the $8k tax credit for first time home owners.

Get the information right from the horse's mouth.

[fingers80002]

Get the information right from the horse's mouth.

Don't you mean horses ass?

[MikeinPhilly]

If I am not mistaken all of the previous "stimulus" or rebates/refunds under Bush were taxable as well. Anytime you're given cash so to speak it ends up being taxable I believe. So it makes sense that the 4500 and 8k get taxed.

[camper]

If I am not mistaken all of the previous "stimulus" or rebates/refunds under Bush were taxable as well. Anytime you're given cash so to speak it ends up being taxable I believe. So it makes sense that the 4500 and 8k get taxed.

No, the 600 per adult / 300 per kid (or whatever it was) was a refund, and not taxable. THere was lots of misinformation spread out about it to get people pissed at bush for it (give me a benefit then tax it kind of stuff) but you will NOT pay tax on whatever refund you got...because refunds are not taxable income.

Government INCENTIVES usually are, and this cash for clunkers 'stimulus' is an incentive. ANd technically speaking, if you get 4500 from your car company to buy a car I think you're technically supposed to report that as income...kind of like gambling winnings and products you bought out of state kind of 'supposed to'.

I'll be REALLY curious to know that if the above paragraph is the case (about private incentives) if the .gov will querey the dealerships to find out what other 'incentives' they offered, and tax that also. The government hand is already in the pot iwth that vehicle purchase, so to speak.

camper