@jwg03
While I believe as a matter of principle that the builder and the buyer should not be able to claim credits on the same solar panel installation, I could not find that language specifically written in to the tax law.
Section 25D does say that the buyer of a home containing solar panels may claim the credit as long as they have a statement from the builder that specifies the cost of the solar panels, or they have some other “reasonable“ method of determining what the cost was. Remember that the IRS does not have to award any credit or deduction that you can’t prove with sufficient evidence, so if you find some “reasonable“ method to calculate the cost of the solar panel system, make sure you can prove that if audited.
Section 25D does not say that the buyer may not use the credit if the builder already use the credit in section 48. However, at a minimum, you would have to reduce the cost of the system by the amount of the builder’s credit. For example, if the system cost to build a $20,000, but they received a $2000 credit, the net cost on which you could claim a credit would be $18,000.
The key element of the section 25D credit is that you must pay for the solar system installation. If you can prove you paid for the system, it seems that you may claim the credit regardless of what the builder may or may not have claimed. The law does not discuss the interaction of the two credits—and in reality, some homebuyers might never even know what the builder may or may not have done.
If you are concerned, you should pay for an opinion from your own expert. As a taxpayer whose own tax money is being used to give these credits to other people, I don’t like the idea that the same system would be eligible for two different credits. However, the law does not appear to prohibit it.
