Claiming EV tax credit for a family member

[Theseus]

A family member A doesn’t qualify for the $7500 EV tax credit. But family member B does qualify. Can family member B buy the EV and claim the $7500 credit and turn around and sell the car to the family member A? Would this be illegal?

[mervinj7]

A family member A doesn’t qualify for the $7500 EV tax credit. But family member B does qualify. Can family member B buy the EV and claim the $7500 credit and turn around and sell the car to the family member A? Would this be illegal?

https://www.irs.gov/credits-deductions/ ... 3-or-after

The credit is available to individuals and their businesses.

To qualify, you must:

Buy it for your own use, not for resale
Use it primarily in the U.S.

[SlowMovingInvestor]

A family member A doesn’t qualify for the $7500 EV tax credit. But family member B does qualify. Can family member B buy the EV and claim the $7500 credit and turn around and sell the car to the family member A? Would this be illegal?

https://www.irs.gov/credits-deductions/ ... 3-or-after

To qualify, you must:

Buy it for your own use, not for resale

Note too that there might be sales tax on resale (although many states exempt sales tax for sales to a close family member).

[bubbadog]

What if your own use is just a very short time?

Could one buy an EV, use it a short time (say a month) and gift it or sell to a family member?

[motorider]

I'm looking at used EVs these days and see a lot of fairly new (4-6 month old) and low mileage (<5K) vehicles out there and the asking price is above MSRP for a new one .

I'm not suggesting these owners deliberately chose to resell a car/SUV for a profit but "buyer's remorse" is a real thing. And selling to a family member after "buyer's remorse" is legit, IMO.

[neilpilot]

I'm looking at used EVs these days and see a lot of fairly new (4-6 month old) and low mileage (<5K) vehicles out there and the asking price is above MSRP for a new one .

I'm not suggesting these owners deliberately chose to resell a car/SUV for a profit but "buyer's remorse" is a real thing. And selling to a family member after "buyer's remorse" is legit, IMO.

Legit so long as it’s not premeditated prior to initial purchase

[CC1E]

As with most things involving taxes, you have to decide if you could defend your actions to an IRS auditor. It’s unlikely that keeping the car for one month would meet that burden. Anything less than a year seems risky.

[mervinj7]

I'm looking at used EVs these days and see a lot of fairly new (4-6 month old) and low mileage (<5K) vehicles out there and the asking price is above MSRP for a new one .

I'm not suggesting these owners deliberately chose to resell a car/SUV for a profit but "buyer's remorse" is a real thing. And selling to a family member after "buyer's remorse" is legit, IMO.

Legit so long as it’s not premeditated prior to initial purchase

Does posting in a public forum count as premeditated...

[toddthebod]

A family member A doesn’t qualify for the $7500 EV tax credit. But family member B does qualify. Can family member B buy the EV and claim the $7500 credit and turn around and sell the car to the family member A? Would this be illegal?

To answer the question behind the question you are asking, there does not appear to be any sort of clawback or repayment of the EV tax credit, nor any minimum period of ownership. As others have said, you are not allowed to take the credit if you purchased the vehicle for resale. But you can lease the vehicle, so that's one loophole: Family member B buys the vehicle and leases it to family member A for a year with a buyout option at the end.

Also, your basis is reduced by the amount of the credit, so family member B might owe taxes on the gain if they resell it immediately.

[TomatoTomahto]

I'm looking at used EVs these days and see a lot of fairly new (4-6 month old) and low mileage (<5K) vehicles out there and the asking price is above MSRP for a new one .

I'm not suggesting these owners deliberately chose to resell a car/SUV for a profit but "buyer's remorse" is a real thing. And selling to a family member after "buyer's remorse" is legit, IMO.

Legit so long as it’s not premeditated prior to initial purchase

Does posting in a public forum count as premeditated...

[Pdxnative]

Family member B should look into a lease and whether that prices out better than a purchase. The way the law is being interpreted, the 7500 business credit is available to leasing company to pass along, and also doesn’t carry some of the restrictions the consumer credit does. Some companies are already doing this, VW/Audi for example.

I’m not a big fan of leasing but even if your scenario was okay, there are costs to transferring ownership to factor in.

[harikaried]

you can lease the vehicle, so that's one loophole

Leasing an EV directly from the automaker or dealership allows for the $7,500 tax credit independent of MSRP or income level as it falls under "commercial clean vehicle credit." It seems like Tesla has updated its default lease on the Model 3 to account for this tax credit (that Tesla claims and passes on savings) resulting in a $399/mo payment for 36 months and $4,500 downpayment.

[silverlitegs]

I believe the family member can lease. My understanding is the leasing company is currently getting the credit and hopefully they are passing it on. Then couldnt that family member buy out the lease

[Theseus]

A family member A doesn’t qualify for the $7500 EV tax credit. But family member B does qualify. Can family member B buy the EV and claim the $7500 credit and turn around and sell the car to the family member A? Would this be illegal?

To answer the question behind the question you are asking, there does not appear to be any sort of clawback or repayment of the EV tax credit, nor any minimum period of ownership. As others have said, you are not allowed to take the credit if you purchased the vehicle for resale. But you can lease the vehicle, so that's one loophole: Family member B buys the vehicle and leases it to family member A for a year with a buyout option at the end.

Also, your basis is reduced by the amount of the credit, so family member B might owe taxes on the gain if they resell it immediately.

Thank you. Leasing might be the best approach.

[SlowMovingInvestor]

Thank you. Leasing might be the best approach.

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

[Theseus]

Thank you. Leasing might be the best approach.

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

[toddthebod]

Thank you. Leasing might be the best approach.

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

That is what I was suggesting as well.

[Pdxnative]

Thank you. Leasing might be the best approach.

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

That’s not what I was suggesting. I was suggesting leasing directly from finance company to get the credit rolled into the lease.

If family member wants to set up a commercial entity and handle the required depreciation, additional paperwork, and insurance/liability issues then go for it. Seems like a pain for no real payoff to me. Getting the credit through a lease doesn’t require getting a family member involved.

[Theseus]

Thank you. Leasing might be the best approach.

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

That’s not what I was suggesting. I was suggesting leasing directly from finance company to get the credit rolled into the lease.

If family member wants to set up a commercial entity and handle the required depreciation, additional paperwork, and insurance/liability issues then go for it. Seems like a pain for no real payoff to me. Getting the credit through a lease doesn’t require getting a family member involved.

I am not sure you need to setup a commercial entity. Aren't we be able to lease to someone our home? I am thinking the same thing.

[Pdxnative]

Thank you. Leasing might be the best approach.

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

That’s not what I was suggesting. I was suggesting leasing directly from finance company to get the credit rolled into the lease.

If family member wants to set up a commercial entity and handle the required depreciation, additional paperwork, and insurance/liability issues then go for it. Seems like a pain for no real payoff to me. Getting the credit through a lease doesn’t require getting a family member involved.

I am not sure you need to setup a commercial entity. Aren't we be able to lease to someone our home? I am thinking the same thing.

Here’s the IRS info.
https://www.irs.gov/credits-deductions/ ... cle-credit

[SlowMovingInvestor]

Do you intend to buy out (either early or at lease end)?

I've never leased, so no expert, but I believe some lessors don't allow early buyouts (or make it prohibitively expensive). And some (Tesla's leasing arm for one) don't allow lease end buyout, i.e., they don't have a guaranteed buyout value. (Of course, given that Tesla has slashed prices, the residual value for older leases is likely higher than the market value anyway).

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

That’s not what I was suggesting. I was suggesting leasing directly from finance company to get the credit rolled into the lease.

If family member wants to set up a commercial entity and handle the required depreciation, additional paperwork, and insurance/liability issues then go for it. Seems like a pain for no real payoff to me. Getting the credit through a lease doesn’t require getting a family member involved.

I am not sure you need to setup a commercial entity. Aren't we be able to lease to someone our home? I am thinking the same thing.

Here’s the IRS info.
https://www.irs.gov/credits-deductions/ ... cle-credit

I think that's only for commercial lessors who want to claim the credit. In the OP's case, family member B would buy the car as a regular consumer. Then, B would lease/rent it out, the way a car owner can do on Turo (except here it's to family member A).

Some paperwork might still be required to formalize the rental, but it shouldn't be that much. In fact, member B could also just put member A on his/her insurance to make things simpler, while recovering insurance costs in the rental.

So it's feasible, I think.

[Pdxnative]

Perhaps we are talking about different things. I am thinking in my case in the OP, the family member B will buy and lease it to member A.

That’s not what I was suggesting. I was suggesting leasing directly from finance company to get the credit rolled into the lease.

If family member wants to set up a commercial entity and handle the required depreciation, additional paperwork, and insurance/liability issues then go for it. Seems like a pain for no real payoff to me. Getting the credit through a lease doesn’t require getting a family member involved.

I am not sure you need to setup a commercial entity. Aren't we be able to lease to someone our home? I am thinking the same thing.

Here’s the IRS info.
https://www.irs.gov/credits-deductions/ ... cle-credit

I think that's only for commercial lessors who want to claim the credit. In the OP's case, family member B would buy the car as a regular consumer. Then, B would lease/rent it out, the way a car owner can do on Turo (except here it's to family member A).

Some paperwork might still be required to formalize the rental, but it shouldn't be that much. In fact, member B could also just put member A on his/her insurance to make things simpler, while recovering insurance costs in the rental.

So it's feasible, I think.

Consumer credit applies when buying it for one’s own use though.

[SlowMovingInvestor]

Consumer credit applies when buying it for one’s own use though.

The IRS says

Buy it for your own use, not for resale

That's slightly ambiguous, but I think renting it out means making use of it (to make money for yourself). The key thing the IRS seems to be concerned about is that it's not bought for resale.

I think that someone who bought a car, and then rented it out on Turo can qualify for the credit. This is similar.

Disclaimer: I am not an accountant and could definitely be wrong.

[toddthebod]

Consumer credit applies when buying it for one’s own use though.

The IRS says

Buy it for your own use, not for resale

That's slightly ambiguous, but I think renting it out means making use of it (to make money for yourself). The key thing the IRS seems to be concerned about is that it's not bought for resale.

I think that someone who bought a car, and then rented it out on Turo can qualify for the credit. This is similar.

Disclaimer: I am not an accountant and could definitely be wrong.

The instructions for Form 8936 says:

The following requirements must be met to qualify for the credit.

- You acquired the vehicle for use or to lease to others, and not for resale.

[the_wiki]

A) Making large financial deals with family.
B) Trying to find ways to get around the obvious intent and wording of the tax credit to trick the IRS


Yeah, I see no ways this could backfire….

[Theseus]

A) Making large financial deals with family.
B) Trying to find ways to get around the obvious intent and wording of the tax credit to trick the IRS


Yeah, I see no ways this could backfire….

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

[sunny_socal]

A) Making large financial deals with family.
B) Trying to find ways to get around the obvious intent and wording of the tax credit to trick the IRS


Yeah, I see no ways this could backfire….

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

Agree with this. We all use whatever paths are open to us. Does anyone here not already claim whatever tax credits & deductions readily available to them?

[sc9182]

If you don't qualify for tax-rebate., don't fret necessarily.

I think Tesla Model Y "Performance" (along with long-range and Dual-Motors) priced barely $2K'ish above "long-range and Dual-Motors" model which barely qualifies for the sub-$55K msrp based tax rebate. Usually, "performance" addition/model costs about $5K or higher than "long-range and Dual-Motors" model.

You may not need "Performance" model - but this Perf model got deeper discount than the sub-$55K model by the manufacturer itself. By the time you do the math of missing Tax-rebate, Vs. deeply-discounted "Performance" model price savings., you won't take much of a savings hit -- as "Performance" model packs punch, and better equity/resale value ..

Just saying ..

[SchruteBucks]

If you don't qualify for tax-rebate., don't fret necessarily.

I think Tesla Model Y "Performance" (along with long-range and Dual-Motors) priced barely $2K'ish above "long-range and Dual-Motors" model which barely qualifies for the sub-$55K msrp based tax rebate. Usually, "performance" addition/model costs about $5K or higher than "long-range and Dual-Motors" model.

You may not need "Performance" model - but this Perf model got deeper discount than the sub-$55K model by the manufacturer itself. By the time you do the math of missing Tax-rebate, Vs. deeply-discounted "Performance" model price savings., you won't take much of a savings hit -- as "Performance" model packs punch, and better equity/resale value ..

Just saying ..

This indeed…ordered the MYP after prices slashed earlier this month - delivered last week! We didn’t qualify for the credit, so my rationale to get the Performance was that the spread was only $4k (historically low as it was as high as $12k at one point). After counting for the upgrades between the two models, the YP was actually a much better deal (assuming no tax break) than any other Tesla model. Unbelievably, the price is also $3k lower than when it first came out 4 years ago - not even factoring in that $1 today was worth $1.16 back then, so gets even better. I would go that route as the mental / compartmentalized accounting will calm your angst, and much easier than looking for holes and executing on them, IMO.

[Theseus]

If you don't qualify for tax-rebate., don't fret necessarily.

I think Tesla Model Y "Performance" (along with long-range and Dual-Motors) priced barely $2K'ish above "long-range and Dual-Motors" model which barely qualifies for the sub-$55K msrp based tax rebate. Usually, "performance" addition/model costs about $5K or higher than "long-range and Dual-Motors" model.

You may not need "Performance" model - but this Perf model got deeper discount than the sub-$55K model by the manufacturer itself. By the time you do the math of missing Tax-rebate, Vs. deeply-discounted "Performance" model price savings., you won't take much of a savings hit -- as "Performance" model packs punch, and better equity/resale value ..

Just saying ..

This indeed…ordered the MYP after prices slashed earlier this month - delivered last week! We didn’t qualify for the credit, so my rationale to get the Performance was that the spread was only $4k (historically low as it was as high as $12k at one point). After counting for the upgrades between the two models, the YP was actually a much better deal (assuming no tax break) than any other Tesla model. Unbelievably, the price is also $3k lower than when it first came out 4 years ago - not even factoring in that $1 today was worth $1.16 back then, so gets even better. I would go that route as the mental / compartmentalized accounting will calm your angst, and much easier than looking for holes and executing on them, IMO.

Doesn't Performance version have less range than the regular?

Also I have a 5 year old Model X. I love that one except I feel the road a lot. Not sure their suspension has gotten better or not.

[SchruteBucks]

If you don't qualify for tax-rebate., don't fret necessarily.

I think Tesla Model Y "Performance" (along with long-range and Dual-Motors) priced barely $2K'ish above "long-range and Dual-Motors" model which barely qualifies for the sub-$55K msrp based tax rebate. Usually, "performance" addition/model costs about $5K or higher than "long-range and Dual-Motors" model.

You may not need "Performance" model - but this Perf model got deeper discount than the sub-$55K model by the manufacturer itself. By the time you do the math of missing Tax-rebate, Vs. deeply-discounted "Performance" model price savings., you won't take much of a savings hit -- as "Performance" model packs punch, and better equity/resale value ..

Just saying ..

This indeed…ordered the MYP after prices slashed earlier this month - delivered last week! We didn’t qualify for the credit, so my rationale to get the Performance was that the spread was only $4k (historically low as it was as high as $12k at one point). After counting for the upgrades between the two models, the YP was actually a much better deal (assuming no tax break) than any other Tesla model. Unbelievably, the price is also $3k lower than when it first came out 4 years ago - not even factoring in that $1 today was worth $1.16 back then, so gets even better. I would go that route as the mental / compartmentalized accounting will calm your angst, and much easier than looking for holes and executing on them, IMO.

Doesn't Performance version have less range than the regular?

Also I have a 5 year old Model X. I love that one except I feel the road a lot. Not sure their suspension has gotten better or not.

Yes, it gets 303 when fully charged.

[H-Town]

I'm looking at used EVs these days and see a lot of fairly new (4-6 month old) and low mileage (<5K) vehicles out there and the asking price is above MSRP for a new one .

I'm not suggesting these owners deliberately chose to resell a car/SUV for a profit but "buyer's remorse" is a real thing. And selling to a family member after "buyer's remorse" is legit, IMO.

Legit so long as it’s not premeditated prior to initial purchase

Does posting in a public forum count as premeditated...

yeah it would be Exhibit A

The law and guidance are both clearly written in this case.

[H-Town]

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

Are you sure mega backdoor Roth or backdoor Roth IRA is illegal? Everyone pays taxes on the contribution and any gain between the time of contribution and the conversion. Unless Congress issues law prohibit conversion from 401k to Roth 401k or traditional IRA to Roth IRA, then you can say it's illegal.

[Theseus]

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

Are you sure mega backdoor Roth or backdoor Roth IRA is illegal? Everyone pays taxes on the contribution and any gain between the time of contribution and the conversion. Unless Congress issues law prohibit conversion from 401k to Roth 401k or traditional IRA to Roth IRA, then you can say it's illegal.

I didn't say backdoor ROTH conversion is illegal. What I said is that the congress didn't write the law specifically to allow for backdoor ROTH conversion. But people figured out this loophole and it is legal. This I think is the same unless there is a citation in the law specifically prohibiting it. But @toddthebod already stated that the buying and then leasing is allowed as written in the law.

[Pdxnative]

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

Are you sure mega backdoor Roth or backdoor Roth IRA is illegal? Everyone pays taxes on the contribution and any gain between the time of contribution and the conversion. Unless Congress issues law prohibit conversion from 401k to Roth 401k or traditional IRA to Roth IRA, then you can say it's illegal.

I didn't say backdoor ROTH conversion is illegal. What I said is that the congress didn't write the law specifically to allow for backdoor ROTH conversion. But people figured out this loophole and it is legal. This I think is the same unless there is a citation in the law specifically prohibiting it. But @toddthebod already stated that the buying and then leasing is allowed as written in the law.

So are you not now intending to transfer ownership? Because yes, the law does specifically prohibit taking the credit if the car is acquired for resale. But read the law yourself and make your own judgment. Personally I don’t see the lease as the loophole you do to accomplish what you initially outlined. If you’re now saying you are buying it just to lease it out that’s different.

[Theseus]

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

Are you sure mega backdoor Roth or backdoor Roth IRA is illegal? Everyone pays taxes on the contribution and any gain between the time of contribution and the conversion. Unless Congress issues law prohibit conversion from 401k to Roth 401k or traditional IRA to Roth IRA, then you can say it's illegal.

I didn't say backdoor ROTH conversion is illegal. What I said is that the congress didn't write the law specifically to allow for backdoor ROTH conversion. But people figured out this loophole and it is legal. This I think is the same unless there is a citation in the law specifically prohibiting it. But @toddthebod already stated that the buying and then leasing is allowed as written in the law.

So are you not now intending to transfer ownership? Because yes, the law does specifically prohibit taking the credit if the car is acquired for resale. But read the law yourself and make your own judgment. Personally I don’t see the lease as the loophole you do to accomplish what you initially outlined. If you’re now saying you are buying it just to lease it out that’s different.

I am going to look into if the ownership can be transferred at the end of the lease. A similar process to leased car from a dealer where you pay residual value at the end of the lease but it was predetermined.

[toddthebod]

I am not asking for anything illegal. IRS/Congress allows many things that should be seemingly illegal. E.g. Mega backdoor ROTH or backdoor ROTH. Law was not implemented to allow it. But it is legal to do. Based on the input so far this seem similar (I know none of the replies are legal opinions).

There are many such tax workarounds that people use - especially businesses. Doesn't necessarily backfire.

Are you sure mega backdoor Roth or backdoor Roth IRA is illegal? Everyone pays taxes on the contribution and any gain between the time of contribution and the conversion. Unless Congress issues law prohibit conversion from 401k to Roth 401k or traditional IRA to Roth IRA, then you can say it's illegal.

I didn't say backdoor ROTH conversion is illegal. What I said is that the congress didn't write the law specifically to allow for backdoor ROTH conversion. But people figured out this loophole and it is legal. This I think is the same unless there is a citation in the law specifically prohibiting it. But @toddthebod already stated that the buying and then leasing is allowed as written in the law.

So are you not now intending to transfer ownership? Because yes, the law does specifically prohibit taking the credit if the car is acquired for resale. But read the law yourself and make your own judgment. Personally I don’t see the lease as the loophole you do to accomplish what you initially outlined. If you’re now saying you are buying it just to lease it out that’s different.

I thought that was the plan we were discussing all along, for the lower income family member to purchase the car and lease it to the higher income family member. It's not a loophole, it's explicitly permitted. Now, whether an individual can safely and successfully lease a car to a family member is a-whole-nother question!