SRECs - taxable income

[crkemper360]

With the understanding that only the "net" income I receive from SRECs (i.e., total value minus broker fees) is taxable, is it permissible to reduce this 'net SREC' value by subtracting from it the cost of registering the solar panel facility with the broker, say $50 for PA?

[RobertB4444]

If your SRECs are considered taxable income then you should enter the net amount as 'Other Reportable Income'.  Since the cost of registration reduces the amount that you receive you could net it of that fee.  

@crkemper360 

[crkemper360]

much appreciated.

So, for those keeping track,  it's now 2-1 with the majority of responses permitting the use of/reporting the "net" SREC value.

And 1-0, with subtracting the required registration fee for the solar facility from this "net" value.

Because of the seeming ambiguity of the IRS and the recognition that there's no simple, fact-based, singular way to approach this.  Remember that an IRS letter cannot be cited as a precedent.  So, I'll simply make the best decision in a consistent and documented answer, and then, cross my fingers. It certainly isn't a mountain of money anyway.  So, wish me luck...for the net 7 years.

I wonder how Intuit's legal/accounting department would defend me in an audit?  That's included in one of their packages, right?

[DaveF1006]

Yes, but you have to purchase audit protection in Turbo Tax to have Turbo Tax represent you in an audit. Here are the steps. Before you do this though, I sent you a reply in a previous email how to report this as an investment sale.  i am confident this is the most consistent manner in reporting the sale of your SREC. Here are the steps to purchase audit protection so that you will be fully represented in case if you are audited by IRS.

In Turbo Tax Online.

1. With your return open, select Review from the left menu.
2. Continue until you see the option to purchase MAX Benefits or PLUS Help and Support.
3. Select Add MAX benefits or Add PLUS benefits and proceed. We'll add the MAX or PLUS fees (which includes Full Audit Representation) to your final tax prep bill, which you'll pay before you print or e-file your return.

In Turbo Tax Desktop;

1. With your return open, click the Review tab, then Audit Protection below it.
2. Select Continue on the Full Audit Representation (Audit Defense) offer screen and follow the instructions to purchase (via credit card or deduct from your refund).

@crkemper360