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posted Jul 11, 2022 2:59:30 PM

My dads property has to 2 residents on it, and I live in one. I am looking to install solar panels for us. Can I claim the solar panel tax credit?

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2 Replies
Level 15
Jul 11, 2022 3:20:20 PM

You can claim the credit when the solar panels are installed on your Home.

IRS Form 5695 Residential Energy Credits Instructions - https://www.irs.gov/pub/irs-pdf/i5695.pdf

 

Home. A home is where you lived in 2021 and can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards

Level 15
Jul 11, 2022 3:36:03 PM

The interesting thing here is that Residential energy efficient property credit (for energy generation, including solar, wind and geothermal) can be applied to any home you use as a dwelling.  It does not have to be your main home and you don't have to own it.  On the other hand, the Nonbusiness energy property credit, which covers energy efficient doors, windows, insulation and appliances, only applies to a home that you own and use as your main home.

 

However, be aware that if you are paying to install solar panels on a home you don't own, you are taking some risk.  You might pay $10,000 and get a $2600 credit, but you are still out $7400.  If something unexpected happens, you are dependent on other people's good will to take care of you.  For example, if there is a house fire, the insurance will pay 100% to the owner and nothing to you.  If there is family trouble, a dispute over inheritance, foreclosure, or something else bad happens, you have no way to protect your investment.