E-Alert
July 10, 2009
Cash for Clunkers
President Signs Act Encouraging Fuel Effeciencies for Cars
The President recently signed the Consumer Assistance and Save Act of 2009, commonly known as "Cash for Clunkers". Car dealerships that register for this voluntary program will receive vouchers for qualifying trade-ins on the purchase of new vehicles.
To qualify, the fuel efficiency of the new car must exceed the fuel efficiency of the trade in by specified amounts. Depending on the increased fuel efficiency, the voucher amounts will be $3,500 or $4,500 and are to be treated as the down payment on the purchase.
But hurry, this applies only to purchases made between July 1, 2009, and November 1, 2009.
For Federal purposes, the voucher is not treated as gross income of the purchaser. However, unless the Legislature enacts conforming legislation, the voucher will be treated as gross income for California purposes.
If you have any questions regarding the information in this article, or have any other issues you would like to discuss, please feel free to contact the DZH Phillips tax department at 415.781.2500 or email cpas@dzhphillips.com.
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