08 Jan 2023
0

Unpacking the Clean Vehicle Credits under IRA ’22

Roger Rossmeisl, CPA
Automotive, Individual Tax Briefs
Unpacking the Clean Vehicle Credits under IRA '22

The Clean Vehicle Credit, brought to you by the Inflation Reduction Act of 2022 (IRA '22), is the successor to the New Qualified Plug-in Electric Drive Motor Vehicle Credit.  The credit generally applies to vehicles having at least 4 wheels that are placed in service from 1/1/2023 - 12/31/2032. This post is broken down into the following sections: Credits for New Clean Vehicles Purchased in 2023 or After Credits for New Plug-in EVs Purchased before 2023 Used Clean Vehicle Credit Commercial Clean Vehicle Credit CREDITS FOR NEW CLEAN VEHICLES PURCHASED IN 2023 OR AFTER If you buy a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit. Who Qualifies You may qualify for a credit...

04 Jan 2023
0

How to Minimize the S Corporation LIFO Recapture Tax

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
How to Minimize the S Corporation LIFO Recapture Tax

If you’re considering converting your C corporation to an S corporation, be aware that there may be tax implications if you’ve been using the last in, first out (LIFO) inventory method. That’s because of the LIFO recapture income that will be triggered by converting to S corporation status. Consider computing in advance what the tax on this recapture would be and to see what planning steps might be taken to minimize it. Inventory reporting As you’re aware, your corporation has been reporting a lower amount of taxable income under LIFO than it would have under the first in, first out (FIFO) method. The reason: The inventory taken into account in calculating the cost of goods sold under LIFO reflects current costs, which are usually higher. This benefit of...

11 Dec 2022
0

Impact of OTA Updates on Dealership Fixed Ops

Roger Rossmeisl, CPA
Automotive
Impact of OTA Updates on Dealership Fixed Ops

As posted to the Bellavia Blatt YouTube Channel on 11/18/22, and the Fixed Ops Roundtable YouTube Channel on 11/18/22 (Run Time: 14 min, 59 sec) As EVs continue to represent a greater percentage of total new vehicle sales, ongoing challenges continue to present themselves forcing automobile dealers to combat the continued erosion of their profits. In this clip, automotive attorney Len Bellavia sits down virtually with Ted Ings at the "Fixed Ops Roundtable" to discuss a number of current issues impacting dealers.  On the subject of over-the-air (OTA) updates, Len reports that GM and Stellantis have announced that the transition to OTAs will cost manufacturers $25 billion per year in lost revenues which will be "coming out of the hides of the fixed ops department of these dealerships". ...

20 Nov 2022
0

The Disruption of Transportation

Roger Rossmeisl, CPA
Automotive, Technology
The Disruption of Transportation

The Great Transformation (Part 2) - The Disruption of Transportation As posted to the Tony Seba YouTube Channel on 10/31/2022 (Run Time 18 min, 23 sec) Part 2 of Tony Seba’s latest presentation on what he calls "The Great Transformation", discusses the disruption of transportation by autonomous, electric, fleet vehicles: Transportation as a Service. "The Great Transformation" is a deep dive into the key technologies that are converging in the 2020s and how they will disrupt the five foundational sectors of the economy: Information, Food, Energy, Transportation and Materials.   Seba’s work focuses on the complex patterns and dynamics of change, disruption, and transformation at all scales. He is the author of Clean Disruption of Energy and Transportation, and co-author of Rethinking Humanity. The rest of the presentation can be seen here: The...

23 Oct 2022
0

The Future of the Dealer Franchise

Roger Rossmeisl, CPA
Automotive
Legal Protections Franchise Dealers Have Against Direct Manufacturere Sales

As posted to the Bellavia Blatt YouTube Channel on 9/30/22, and the Fixed Ops Roundtable YouTube Channel on 10/8/22 (Run Time: 17 min, 52 sec) With automakers speeding toward electrification, many are more than hinting at a new distribution model for those electrified vehicles involving customers ordering vehicles online.  Are dealers at risk of being cut out of the sales process? In this clip, automotive attorney Len Bellavia sits down virtually with Ted Ings at the "Fixed Ops Roundtable" to discuss the future of the franchised dealership network model. Len's position is that the real risk is whether or not dealers are going to invoke their rights under their respective states' franchise laws which have been on the books for decades, designed to protect against this very subject. "State Dealer...

28 Aug 2022
0

JB Straubel on Recycling EV Batteries to Create a Closed-Loop System

Roger Rossmeisl, CPA
Automotive, Technology
JB Straubel on Recycling EV Batteries to Create a Closed-Loop System

As posted to the Redwood Materials YouTube page on 8/11/22 Run Time 41 minute, 15 seconds In this clip, JB Straubel, Founder & CEO of Redwood Materials and Tesla co-founder & former CTO details how recycling lithium-ion batteries will cost effectively help EV demand & supply chain needs.  Of concern however is that legacy automotive manufacturers haven’t “done the math” on attaining the raw materials needed to produce batteries in their transition to electric vehicles, and skepticism among mining companies about the future demand of EVs and the truly massive transformation of industry necessary to transition the world to a sustainable energy economy. JB believes that it is going to be challenging for auto makers coming into EV production a bit late. Securing enough supply of batteries...

23 Aug 2022
0

IRS/Energy Dept Issue Guidance, List of Cars Eligible for Revised EV Credit

Roger Rossmeisl, CPA
Automotive, Individual Tax Briefs, Small Business Tax Briefs
IRS/Energy Dept Issue Guidance, List of Cars Eligible for Revised EV Credit

On its website, the IRS has issued guidance  on accessing the Inflation Reduction Act of 2022's tax credits for electric vehicles ("Plug-in Electric Drive Vehicle Credit at a Glance"), while the Energy Department listed credit-eligible cars, trucks, and SUVs ("List of Vehicles with Final Assembly in North America") on 8/16/22, just hours after President  Biden signed the law. Credit Amounts The Act introduces a $4,000 tax credit for the purchase of used electric vehicles (EVs), and updates the $7,500 credit for new EVs . . . Vehicle Price Caps A major change however is the introduction of caps on the price of new vehicles, based on the buyer's income, that qualify for that credit. The caps imposed are: $55,000 for electric cars, and $80,000 for SUVs and pickup trucks. Final Assembly...

23 Aug 2022
0

The Auto Industry is Likely to Decline in Enterprise Value

Roger Rossmeisl, CPA
Automotive
The Auto Industry is Likely to Decline in Enterprise Value

Excerpt of an article posted to the ARK Invest website on 7/15/22 According to the research of ARK Invest, during the next five years the auto industry as measured in units will grow, but as measured by enterprise value, it will shrink. In 2021, the number of light vehicles sold globally was 78 million and the enterprise value of automakers, roughly $3.5 trillion. According to IHS Markit, during the next five years unit auto sales will increase at a 4.7% compound annual growth rate and hit a new high at 98 million units in 2026. ARK’s Non-Autonomous EV Base Case agrees with the consensus view that unit sales will increase by 20 million during the next five years but that the enterprise value of global automakers...

09 Aug 2022
0

A Candid Talk with Ford CEO Jim Farley on Ford’s EV Future

Roger Rossmeisl, CPA
Automotive
A Candid Talk with Ford CEO Jim Farley on Fords EV Future

As posted to the Munro Live YouTube Channel on 8/1/2022 (Run Time 49 min, 46 sec) Ford CEO Jim Farley, Linda Zhang (F-150 Chief Nameplate Engineer), and Doug Field (Chief Officer of EVs and Digital Systems) deliver Munro & Associates a Ford F-150 Lightning and sit down for a down-to-earth interview with Sandy Munro to discuss, among other things, urgent changes necessary to avoid a financial calamity in the transition to EVs. (This is Blog Post #1250) Sandy Munro is an automotive engineer who specializes in machine tools and manufacturing. He joined the Ford Motor Company in 1978 and then started his own consulting company, Munro & Associates, which specializes in lean design, tearing down automotive products to study and suggest improvements and innovations....

31 Jul 2022
0

Attention OEMs: The Age of “Catalog Engineering” is Over

Roger Rossmeisl, CPA
Automotive
Attention OEMs: The Age of Catalog Engineering is Over

Excerpt of an article posted to the Memos by Heller House website on 7/27/22   In their book The Innovator's Solution, Clayton Christensen and Michael Raynor cite the example of IBM as a cautionary tale against outsourcing activities that "might seem to be a non-core activity today" but that "might become an absolute critical competence to have mastered in a proprietary way in the future". IBM decided to outsource the microprocessor for its PC business to Intel, and its operating system to Microsoft.  IBM made these decisions in the early 1980s in order to focus on what it did best - designing, assembling, and marketing computer systems. In the process of outsourcing what it did not perceive to be core to the new business, IBM put into business the...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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