Hi,
My husband and I purchased and installed a solar system on our current home last year (2023). The purchase was made via a solar loan which is transferrable to the new owners. I filed Form 5695 Residential Energy Credit with our 2023 taxes and have a "credit carryforward" to 2024 and possibly beyond. We are now in the process of selling our current home and will be transferring the loan with full warranty to the new owners.
Note: The additional payments we have been making, as per the loan agreement, are the exact amount of the solar tax credit due. So we will have basically paid the solar tax credit up front when we sell the home which then keeps the monthly payments fixed for the new owners for the life of the loan.
We basically would have already received the full credit if we had had enough taxes due in 2023, so I am thinking we just continue to file and receive the credit carryovers? Based on my note above, we are just recouping what seems to be the solar tax credit paid in the additional payments allowing the loan to now remain fixed. Or, are we only entitled to a percentage of the credit since the loan is being transferred?
Very much appreciate any clarity you can provide us with.
