How do I compute the adjusted basis of the solar electric system when I get a residential clean energy property credit of 30% of the cost? Thanks.
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Yes, the tax credit does not reduce your basis.
The adjusted basis of the solar electric system is the cost of the system less any rebates or discounts. If you received a rebate from your local utility then you need to reduce the cost of the system by that amount.
@pahnert
Is the federal tax credit considered a 'rebate' for the purposes of reducing the adjusted cost basis?
No.
@pahnert
So, I can still depreciate the full cost of the solar electric installation, even after getting the federal tax credit?
Yes, the tax credit does not reduce your basis.
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