SRECs - report net or gross income?

[crkemper360]

I understand from reading previous posts (posted several years ago) that the income from SRECs is considered taxable income by the IRS, and should be shown as 1099-MISC.  BUT, what value is to be used?  The sale of SRECs is typically through a broker (SRECTrade, SolSys, etc.) and I don't receive a 1099-MISC from them.  Is the gross value to be used on my tax forms or the net value (total value minus the brokerage fees)?

[SabrinaD2]

When reporting income from Solar Renewable Energy Credits (SRECs) to the IRS, you should use the gross value of the income received from the sale of SRECs. This means you report the total amount before deducting any brokerage fees or other expenses.

Even though you don't receive a 1099-MISC from the brokers, you can still report this income under "Other Reportable Income" on your tax return:

Steps to Report SREC Income in TurboTax without a 1099-MISC

1. Open your return in TurboTax.
2. Click on Income
3. Scroll to bottom Income screen and click Add Income
4. Scroll down to the Less Common Income next to Miscellaneous Income, 1099-A, 1099-C and select form
5. Go Back to Income screen and click on pencil next to Miscellaneous Income, 1099-A, 1099-C and
6. On the Miscellaneous Income screen, scroll down and select Other reportable income.
7. When asked, "Any Other Taxable Income?", click Yes.
8. Enter a description such as "SREC Income" and the total amount received from the sale of SRECs.

For more detailed guidance, you can refer to the IRS's Frequently Asked Questions about Energy-Efficient Home Improvements and Residential Clean Energy Pro...

[crkemper360]

this is contrary to an earlier post, wherein it was stated that the "net" value (i.e., total value minus the broker fee) is what's to be reported.  guess it's a coin toss and wait for the IRS call of an audit.

[DaveF1006]

It depends because the SREC is an investment and can be reported as an investment sale rather than other income. Here is how to report.

1. Go to federal
2. Wages and income
3. Investment Income”
4. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’  
5. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
6. Since you did not receive a 1099-B, answer “no” to the 1099-B question
7. Choose type of investment you sold - select everything else
8. What type of investment other
9. How did you receive the investment. Indicate you purchased it. 
10. In description type in SREC
11. Some basic information:
    1. Description –  Usually Once he address of the property sold
    2. Sales Proceeds –  The amount you received for the sale
    3. Date Sold – Date you sold the property
    4. Cost or other basis  (This is the price of purchase.) 
    5. Date purchased
12. On the next screen it asks if you had selling expenses, here you can deduct broker commissions as these are used to reduce the capital gains from the sale. 

@crkemper360