Volkswagen 'Hoarders' Say They're Making Huge Profits Off The Diesel Buyback

[The Broken Regal]

Can they get some kinda deal? Looks like they can get something. But dunno if I'd call it a "buyback" because it doesn't include the "loan forgiveness" component that the older owners can get in most cases. Its also 10% vs 20%, less restitution, etc.

Whatever though. If someone wants to buy a TDI to get some $ back from VW - more power to them. BTW, they'll be paying taxes on all that money they get back too.

I don't think the loan forgiveness part would even apply because that was intended for the people who bought new pre sept 15.

You have to remember there was a damn firesale on these things until the exact buyback figures were announced and the base buyback amount is the blue book value pre-2015 which is VERY high. There are tables you can see that even like a 2011 golf base tdi pulls 15k and I guess the miles don't matter or factor in very little. Those cars were going for easily under 10k when people freaked out during the scandal

Another fun part of this whole thing is you can continue to drive your car until 2018 when the settlement period ends and then do the buyback using the same figures from 2015 minus the mileage adjustment but it's pennies on the dollar off the value

 

[Dan00Hawk]

You don't pay tax when you sell your vehicle, as you paid tax when you purchased it. The buyer is responsible for any sales tax, not the seller (VW owner). Whether you sold a regular car for $25k to some guy on the street or $25k to VW in the buyback program, why would you pay tax on any of that? Also VW owners who participate in the buyback also cannot benefit from tax savings if they trade their vehicle in for another VW.

 

[Eagle]

Actually, it depends.

Taxable or not
In general, “any settlement you get for something other than personal physical injury or sickness is taxable,” said Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting. Most other settlements, such as for back pay and punitive damages, are taxable.
In the case of property, if the settlement merely restores your original value, it’s not taxable, but if it enriches you beyond where you were before, it is taxable, he said.
Theoretically, owners who sold their cars back would not owe tax if the combined payment (trade-in plus cash payment) was less than their basis, which is generally what they paid for the car (or the depreciated basis if they used it in a business). If it was more than their basis, they could owe tax on the excess.
If they kept the car and got it fixed, the cash payment likely would not be taxable if the payment is designed to compensate them for lost value.
If they leased the car, the payment could be taxable because “they had no basis” in the car, according to Luscombe.

What VW drivers should know about the giant emissions settlement - SFGate

 

[Dan00Hawk]

I do see where it could be a "capital gains" tax. That makes sense. Apparently VW is not issuing any 1099 forms, so it would likely be easy for someone to not worry about it.

 

[The Broken Regal]

I did not receive any tax forms from the small lease compensation check I got from VW for my tdi, was waiting for one