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Cash for Clunkers Surprise

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I wonder how many people knew when they purchased their new car using the "cash for clunkers" program that the government's rebate of up to $4500 dollars for their "clunker" is considered taxable?

I guess people are now finding out and are not exactly happy...

Did any of you all know the rebate was taxed?

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Good, the sting of me helping everybody else buy a new car doesn't hurt as much now. wink

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Quote:
I wonder how many people knew when they purchased their new car using the "cash for clunkers" program that the government's rebate of up to $4500 dollars for their "clunker" is considered taxable?

I guess people are now finding out and are not exactly happy...

Did any of you all know the rebate was taxed?

Hogwash wink

Quote:

Is the credit subject to being taxed as income to the consumers that participate in the program?

NO. The CARS Act expressly provides that the credit is not income for the consumer.

Click Here To Find Out!

Now if the State of MN (or any other state) considers it taxable income, that is another story!

I am not sure when you posted "taxable", if you ment as income or as sale taxable? If they are griping about the $4500.00 being state sales taxed now, they should have read their purchase agreement better wink

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On the main Q & A Page for the Cars web-site the following question is posed: "Is the credit subject to being taxed as income to consumers that participate in the program?" The answer posted right there in bold capital letters states "NO." The answer goes on to explain that "The CARS Act expressly provides that the credit is not income for the consumer." This is as plain as day as an answer can be when it comes from the Government, and there isn't much there that can confuse the reader that is looking to learn more about the Cash for Clunkers program. This is not an income to consumers, and therefore isn't under an income tax penalties.

Shack is right though, who knows about the state of MN and CA??? These liberal states may try to get you coming and going!

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My understanding is that if you sell your private auto, the states can tax you for the income. So you get a $4,500 credit for your used car as trade in (gov't bought your car) you will pay the tax.

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Ya, it is taxable income threw the IRS, but for the dealers who took in the C.A.R.S. program funds involved of a car sale smirk

Just more internet hype, that gets switched around!

Quote:
Clunkers Rebate Taxable?

August 26, 2009 02:01 PM EDT

Keloland.com in South Dakota reported August 24 that the cash for clunkers rebate instituted by the federal government is taxable. The story says:

"...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."

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

Now, I had never heard of Keloland from South Dakota, so I did a Google search for another source. I found this at autonews.com:

"It turns out dealers will have to pay taxes on the thousands of dollars in rebates they receive under the federal cash-for-clunkers program, according to an IRS advisory bulletin issued today. The cash-for-clunkers measure, known as the Consumer Assistance to Recycle and Save Act of 2009, exempts consumers who take advantage of the program from paying taxes on the rebate. But it does not exempt car dealers."

Okay, so there seems to be some confusion. I would suspect that the autonews story has it right, since they cite an IRS bulletin in their story.

But then there's this line: "A NHTSA official assured car dealers listening in on a National Automobile Dealers Association webinar Monday that they would not be taxed on the rebates."

Then how do you explain the IRS bulletin? If we are taxing the dealers, isn't that taking away some of the benefit, especially if that tax is not passed on to consumers?

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I have some family members that work / own a deelership and they said that its the worst goverment program that they have ever sceen. not only are people geting taxed, but it also can take a mo to go through. And then to make things worse the deelerships arnt seeing there Money from the goverment. I am not sure how many dealerships can afford that.

In my Opinion its decision by OBAMA to waste that kind of money when half the people that trade in there cluncker cant afford a new vehicle anyways. I bet 1/4 of them will be repossesed anyways within 3 yrs

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My understanding is that if you sell your private auto, the states can tax you for the income. So you get a $4,500 credit for your used car as trade in (gov't bought your car) you will pay the tax.

That may be true if you sell your vehicle to a private party but not if you trade it in. In fact you pay less taxes if you trade because they take the trade amount off the sale pice and the sales tax on the new vihicle is based off that. For example if you buy a vehicle for $20,000 and have a trade in worth $5000 you are taxed on $15,000.

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"In my Opinion its decision by OBAMA to waste that kind of money when half the people that trade in there clunker cant afford a new vehicle anyways. I bet 1/4 of them will be repossessed anyways within 3 yrs"

B------I------N-------G------O

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Did Obama, force there hand to sign the documents to buy the new car? He must have made a lot of stops at dealerships, I mean with all that coaxing he did. Come on people!

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SO if you righties are really concerned about 3 billion dollars being spent at home to try and get people into newer/greener cars. Then you must not have a problem with 915 billion.

About The Cost of War:

To date, $915.1 billion dollars have been allocated to the wars in Iraq and Afghanistan. The national, state, and local numbers we provide are based on the total approved amounts through the end of Fiscal Year 2009.

In addition to this approved amount, the FY2010 budget shows a $130 billion request for more war spending. This would bring total war spending in Iraq and Afghanistan to more than $1 trillion. When all FY2010 war-related amounts are approved, we will adjust the counter so that it reaches the new total at the end of FY2010.

If you should compare the amount displayed on the numbers in our information sheets with the Cost of War counter, please note that the information sheets include all war spending approved to date, the same number that the counter will reach at the end of the 2009 fiscal year.

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Just keep swimming up that river of da-nile Shack.

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Or if that is too big of a number for you how about the magical 8.8 billion that simply vanished????

Audit Shows $8.8B Missing in Iraq

Friday , August 20, 2004

WASHINGTON —

A soon-to-be-released audit will show that at least $8.8 billion in Iraqi money that was given to Iraqi ministries by the former U.S.-led authority there cannot be accounted for, FOX News has confirmed.

And three senators want to know where the cash is.

The draft audit by the Coalition Provisional Authority's (search) inspector general chastises the CPA — formerly led by L. Paul Bremer — for "not providing adequate stewardship" of at least $8.8 billion from the Development Fund for Iraq. The audit is not expected to be released for at least two or three more weeks, possibly longer.

The audit was first reported on a Web site earlier this month by journalist and retired Col. David Hackworth. A U.S. official first confirmed to Reuters the contents of the leaked audit cited by Hackworth were accurate.

The development fund consists of proceeds from Iraqi oil sales, frozen assets from foreign governments and surplus from the U.N. Oil-for-Food (search) program. Its handling has already come under fire in a U.N.-mandated audit released last month, which found no evidence of spending fraud by the CPA but said there wasn't enough oversight to ensure money was used for its intended purposes.

One of the main benefactors of the Iraq funds was Texas-based firm Halliburton, which was paid more than $1 billion of that money to bring in fuel for Iraqi civilians. The monitoring board said it had not been given access to U.S. audits of contracts held by Halliburton (search).

A three-member panel led by Paul Volcker is also investigating the Oil-for-Food scandal. The panel says it has evidence that dozens of people, including top U.N. officials, took kickbacks from the $67 billion program.

The most recent draft audit so far found that payrolls in Iraqi ministries under CPA control were padded with thousands of ghost employees.

In fact, Reuters reported, in one example, the audit said the CPA paid for 74,000 guards even though the actual number could not be validated. In another, 8,206 guards were listed on a payroll but only 603 people doing the work could be counted.

FOX News confirmed that Democratic Sens. Ron Wyden of Oregon, Tom Harkin from Iowa and Byron Dorgan of North Dakota want Defense Secretary Donald Rumsfeld (search) to tell them what the funds have been used for by the CPA, which handed over sovereignty to the Iraqis in June.

"The CPA apparently transferred this staggering sum of money with no written rules or guidelines for ensuring adequate managerial, financial or contractual controls over the funds," said the letter sent by the senators on Thursday, obtained by Reuters. "Such enormous discrepancies raise very serious questions about potential fraud, waste and abuse."

In June, Britain's third-largest political party, the Christian Aid, and aid activists from Christian Aid said that billions of dollars belonging to Iraq wasn’t accounted for by the CPA and that there were glaring gaps in the handling of $20 billion generated by Iraq's oil and other sources since the U.S.-led war to oust Saddam Hussein ended last year.

FOX News' Bret Baier, Ian McCaleb and The Associated Press contributed to this report.

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I think I am more confused... and I am also not wanting to give misinformation...I Looked up the official HSOforum for the cash of clunkers and found this:

"Do I have to pay State or local sales tax on the amount of the CARS program credit?

MAYBE. The question of whether a consumer must pay State or local sales tax on the amount of the CARS program credit depends on the sales tax law of each State or locality. Consumers should review the law of their respective States or consult a tax advisor to answer this question."

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Just keep swimming up that river of da-nile Shack.

Either one can sit and think, spread the word on the internet that the sky is falling, or look outside and see it is not wink

Doom and Gloom is not my cup of tea grin

Quote:
In my Opinion its decision by OBAMA to waste that kind of money when half the people that trade in there cluncker cant afford a new vehicle anyways. I bet 1/4 of them will be repossesed anyways within 3 yrs

You obviously have not financed or talked with people who get financing in the automotive dealerships. It is the toughest it has ever been to get people, even people with good credit and low income to debt ratio approved.

I agree, this is the "worst" 3 billion of the tax payers dollars our government has ever wasted smirk

Now the $700 billion financial bailout Bush signed into legislation last Oct., NOW that was money well spent wink We will make a sizable return on that investment whistle Way better than the $787 billion Obama signed earlier this year.

WHOOUUA! This 3 billion sure was a disaster grin Much so, I can not even sleep at night anymore. $3 billion dollars cry and because of this, the White House has to go without new lamp shades for two years frown

Biggest mistake of $3 billion government wasted, tax payers blood and tears that has ever happened. The Conserves and Rep's should get their impeachment soon. Stay turned to Fox for further updates. laugh

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I never said if I was a conservative or liberal, but what bothers me is when you said it is ONLY 3 Billion dollars. If the lefty's still have issues with the War then why don't they pull out? Or why did they keep Robert Gates as the Secretary of defense? Gates is the only Secretary of Defense in U.S. history to be asked to remain in that office by a newly elected President.

As for getting into newer or greener cars, that is great... I just don't want to pay a portion for your new car...

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Okay, so you bring in a clunker worth $500.00 and get $4,500.00 for it in trade on a new vehicle and you complain about paying sales tax? I'm not feeling much sympathy here.

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Okay, so you bring in a clunker worth $500.00 and get $4,500.00 for it in trade on a new vehicle and you complain about paying sales tax? I'm not feeling much sympathy here.
I was thinking the same thing.

Hmmm slapping a gift hoarse in the mouth doesnt get one far. But of coarse we are talking about the federal government and lord knows they get slapped alot but they keep coming back for more. grin

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Okay, so you bring in a clunker worth $500.00 and get $4,500.00 for it in trade on a new vehicle and you complain about paying sales tax? I'm not feeling much sympathy here.

I agree Bob.

Originally Posted By: PK
As for getting into newer or greener cars, that is great... I just don't want to pay a portion for your new car...

PK, the way I feel about this is we (taxes payers of America) have been paying for peoples personal use of cars for many years. Government program cars, government funded (subsidized) donate your car programs for people in need, Federal Grants used to buy cars and trucks (pay back grants or not, or just did not pay back), any other government fleeced program that has lead to funds to buy a vehicle and people to deprecate their vehicles who should not on their taxes. Plus anything else I did not list. Something like this:

I know I have used this one before, but cracks me up. I am sure many never got caught laugh Bush Sir. was running the show back then, Regan before him.

The cash for clunkers program just came threw above the wire, more so than others government option to get a vehicle that have been in place for years.

This program IMO was for the working middle class family, single person, married couple who has good credit, saved some money to buy a car (or put down a good chunk which is needed right now if not paying full), driven a sub par car for years (or at least the last couple), had insurance and want to upgrade. In theory, this is supposed to help stimulate our economy. Will it? I do not know, but at least some people who have never been able to qualify for a government "perk", but paid their taxes , can take advantage of this.

I am one of those people. I elected not to buy a "new car" with this program, but I fit the above. I waited to buy a new car the last 3-5 years. I drove my 91 linc... I am sorry most of the people who have an issue with this program did not or are not in a position to buy a new car right now. Maybe they bought new cars 2 years ago whistlegrin

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I think the only complaint is that it was not foretold about the tax.

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Originally Posted By: LMITOUT
Just keep swimming up that river of da-nile Shack.

Either one can sit and think, spread the word on the internet that the sky is falling, or look outside and see it is not wink

Some should do some more thinking then.

People who fell for this charade paid tax on that $4500 (or less depending on circumstances), and possibly will be paying tax on that $4500 twice depending on which state you live in. It has nothing to do with the C4C program, it's the tax code...state and federal.

The other thing people got hosed on was the price of these vehicles which were marked up to 20% higher in some instances than they had been prior to the program, so the C4C money was nothing more than bait to get people off the fence to buy that car they were probably going to buy sooner or later anyway. They really didn't gain that much when it's all said and done, and will have gained even less come next April 15th. Before someone starts blathering on that 'it doesn't matter at least the car dealers sold some cars', they should look at the overall retail sales numbers that were recently released and see that they were DOWN. Why? Because consumers spent their money on cars instead of other things, so while the dealers made out like bandits on marked up cars everyone else suffered. There was no stimulus created but just a shift of money from sector to sector. The only thing that was created was more personal debt which got us into this mess in the first place.

In Carnac-like fashion, I put the little envelope to my temple and predict the states will be crying they have less revenue in gas tax monies in the near future, thanks to these cars which are somewhat more gas efficient than the so-called "clunkers" that were pulled off the roads. Guess what happens then? No, they don't reduce spending, they raise taxes....on all of us! (Well, at least in MN they will.)

The entire program was fraudulent from the word go.

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Now were talkin'

Good post Limit, it just amazes me that some people agree with all these bailouts. Do they actually think our commander in chief just prints off more money when he needs it? If they do, they are correct in thinking that because that is exactly what he is doing...

My parents always told me "Money doesn't grow on trees" well in this administration I guess it does just that.

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Quote:
Some should do some more thinking then.

People who fell for this charade paid tax on that $4500 (or less depending on circumstances), and possibly will be paying tax on that $4500 twice depending on which state you live in. It has nothing to do with the C4C program, it's the tax code...state and federal.

The other thing people got hosed on was the price of these vehicles which were marked up to 20% higher in some instances than they had been prior to the program, so the C4C money was nothing more than bait to get people off the fence to buy that car they were probably going to buy sooner or later anyway. They really didn't gain that much when it's all said and done, and will have gained even less come next April 15th. Before someone starts blathering on that 'it doesn't matter at least the car dealers sold some cars', they should look at the overall retail sales numbers that were recently released and see that they were DOWN. Why? Because consumers spent their money on cars instead of other things, so while the dealers made out like bandits on marked up cars everyone else suffered. There was no stimulus created but just a shift of money from sector to sector. The only thing that was created was more personal debt which got us into this mess in the first place.

In Carnac-like fashion, I put the little envelope to my temple and predict the states will be crying they have less revenue in gas tax monies in the near future, thanks to these cars which are somewhat more gas efficient than the so-called "clunkers" that were pulled off the roads. Guess what happens then? No, they don't reduce spending, they raise taxes....on all of us! (Well, at least in MN they will.)

The entire program was fraudulent from the word go.

Funny thing huh? whistle $158 billion "stimulus" and almost no one complained?

Heck it seemed LMITOUT was first in line to "get his" laugh , he even started the thread! whistle

Click Here!

"their pittance yet", what? Not enough government cheese for ya LIMTOUT? laugh

The state(s), if I recall, took their share out of that $158 billion government stimulus program.

Heck, many, many "I got mine's" in that thread by a bunch who are apposed to this whopping $3 billion dollar program confused Lots of "beer" and "woman" made out on that stimulus program though grin I am sure many used it to buy economically stimulating goods though wink

When we push our selves to "think" something is bad, there will be 3,000,000,000 diffrent ways our minds will find to prove "I AM Right That This Is Wrong". grin Never mind about the past though whistle Then when we get a "piece", we seem to find the good in that something we found bad laugh

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Lot prices were no doubt raised so that the real winner wasn’t “Joe Public” is was once again the car dealers. My parents had been looking for a new vehicle for a few months prior to the program and had a lock on the area prices.

The program was implemented and guess what. The prices magically were adjusted upward.

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