solar panels in primary residence with office in home

[davewrose]

Installed in 2019.  I am aware of the percent usage rule.

Please clarify.  These are items I have read about solar panels

(1) basis of solar panel for depreciation  (cost minus 50% of the 30% solar tax credit)?

(2)  Depreciable Life of the panels:   5 years, or 39 (same as residence)?

(3)  How to enter in turbo tax (Add as a depreciable asset in OIH)?

Thank you.

[ColeenD3]

Please see the link below to see the entire answer by Ashby. While his answer applies to rental property, you can use the 85% as a starting point. Yes, you would enter as an asset in OIH.

You can take a 30% credit AND depreciate 85% of the cost of your solar energy panels.

To take this, you would have to fill out that form yourself and print and mail your return with that form attached.

Solar panel

[davewrose]

I am taking the 30% tax credit as a Residential Energy Credit.. 

When I add the asset to Turbo Tax as OIH the depreciation is taken over 39 years.  

How can that be changed to 5 years for solar panels?    Can I add it as a business asset at the same use % as the office in home?

[ColeenD3 · Accepted solution]

Enter it as a separate asset, as you would a chair, desk, computer, etc. Yes, it would follow the same percentage as OIH.

[sgt3030]

paid for solar panels on home

[DawnC]

A Solar Energy Tax credit is a nonrefundable credit.   To claim a 30% credit, the solar PV system must have been installed before December 31, 2019.   The credit decreases to 26% for systems installed between January 1, 2020 and December 31, 2022, and to 22% for systems installed in 2023.  Unless Congress renews it, the credit expires in 2023.

Note: To claim the Solar Energy Federal Tax credit, you need to complete and attach the IRS Form 5695 to your federal tax return.   For info on where to enter qualified energy-saving improvements, go here.   @sgt3030

TurboTax will calculate the credit and put it on Form 5695 when you claim the credit.   To see all of the qualifications for the Solar Tax Credit, see this FAQ.  

Form 5695 (Residential Energy Credits) is used to calculate tax credits for energy efficient improvements and alternative energy equipment.   To add or remove this form:

1. Open (continue) your return if you don't already have it open.
2. Inside TurboTax, search for this exact phrase including the comma and spaces: 5695, residential energy credit
3. Select the Jump to link in your search results.
4. At the bottom of the Energy-Saving Home Improvements screen, answer Yes, then select Continue.
   • To delete the 5695, answer No, select Continue, and then answer Yes on the following screen to confirm the deletion.
5. Follow the instructions to enter your energy-saving improvement costs.

[forensicmd]

I installed solar panels and batteries at the end of 2021 on the house roof which is on a ranch. It serves as power, backup power, and runs the well pump for livestock. I am taking the 26% energy tax credit on my 2021 taxes. I run a home office in the house for an online consulting business and I personally run the ranch.  Is the remainder of the solar loan, 74%, eligible for some sort of depreciation?  I've been told conflicting things; that it isn't eligible as a farm depreciation because it isn't mounted on the barn; that I can take it as a farm deduction just by it being on the property. I see it is possible to potentially take some of it at least as a home office depreciation based on the size of the office. Obviously if it would qualify for the whole 74% would be ideal. I would like to expand the system and go off grid but would need more of the 'rules' to make it eligible for tax depreciation/credits.  Also, how many years depreciation if it does qualify? Thanks in advance.