Posted by Herb Kravitz on February 12, 2001 at 17:57:46:In Reply to: Re: Tax credit? posted by Colin Glassey on January 08, 2001 at 19:29:48:
Subject:
IRS Email Tax Law Assistance
Date:
Mon, 12 Feb 2001 18:55:03 -0600
From:
TaxHelp@hal1.ausc.irs.gov
To:
kravco1@home.comNOTE: Our response to your tax law question appears below. If you have additional questions
on this or other general tax law topics, please return to our web site at: (http://www.irs.gov/taxlaw) to submit it. Please do not use your "reply" button to send a follow-up question.
Only a vehicle that is powered primarily by an electric engine is eligible for the Electric Vehicle Credit. The Honda and Toyota cars are powered primarily by a gas engine that converts that power to electricity and stores it in a battery/generator. They are, however, clean-fuel vehicles per IRC Section 179A, and thus qualify for the Clean-Fuel vehicle deduction of $2,000 for the year 2000. Reduce line 32 of your Form 1040 by $2,000 and state on the dotted line,
"Clean-Fuel Vehicle Deduction - $2,000".
Your Question Was:
Does the Toyota Prius hybrid (gas electric) motor vehicle qualify as a clean fuel vehicle eligible for a $2,000 credit as outlined in Publicatiom 535 for tax year 2000? Toyota Motor Corp is scheduled to produce 12,000 of these 4 door automobiles for use in the US in the year 2000 and 2001. 1) It is a motor vehicle produced by an original equipment manufacturer and is powered by an electic motor run by a large electric battery. A small ultra low emission gasoline engine is used to charge the battery and at times, boost the power of the electric motor. No external charger is required. 2)The vehicle was acquired for my own personal use and is not for resale. I own the vehicle. It cost $22,000. It exceeds all Federal and State emission requirements. 3) Toyota Motor Corp has stated in a letter to dealers that purchasers of a Prius completed before Dec 31, 2001 are entitled to a Federal tax deduction of up to $2,000 in the year of purchase, as a qualified clean-fuel vehicle under IRC Section 179A. Thank you.
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