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Solar tax credit

Has anyone successfully used turbotax to claim the solar tax credit for rental property - using section 48 I think

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14 Replies
Carl
Level 15

Solar tax credit

I looked at IRC 48, and there's only sections (a) through (d). There is no 48(i) or 48(I). (Note that capitalization of letters matters.)

But from what I find on a Q&A page on the IRS website for IRC 25(C) and 25(D), IRS notice 2013-70 addresses your specific situation. Take a look at question/answer 6 and 7 on that notice at https://www.irs.gov/pub/irs-drop/n-13-70.pdf

Q&A #7 is the most specific, since the dwelling unit is used to conduct business. A rental property is a dwelling unit used to conduct business. So it doesn't qualify for any of the energy credits.

 

Carl
Level 15

Solar tax credit

My original response to this thread has been bugging me. With some highly appreciated help from a colleague I have corrected my original response. So please revisit the message board and re-read my original response which I have now edited and changed.

Solar tax credit

This accounting professor from University of Montana https://www.thetaxadviser.com/newsletters/2017/oct/credit-residential-solar-panels.html

says the investment tax credit for solar panels is allowed for rental property.

My question was how to enter it using turbotax

Carl
Level 15

Solar tax credit

The accounting professor at the University of Montana is not an IRS authority. Neither is the tax advisor website. The website and document I reference *IS* an IRS authority.  If you want to pursue this, ask your accounting professor to sign a notarized legal document that makes them liable and culpable for all taxes, fines, penalties and late fees that will be assed on you, when the IRS audits you and disallows the credit. (will be in the thousands quite easily.)

Carl
Level 15

Solar tax credit

Just got an e-mail from tax advisor on my query about this along with feedback from the TTX folks.   What you're referring to is part of the "Investment Tax Credit" on Form 3468 (Line 12), which flows to Form 3800 (Line 4a?).
https://www.irs.gov/pub/irs-pdf/f3468.pdf
https://www.irs.gov/pub/irs-pdf/f3800.pdf
 

The Form 3468 is completed by the user outside of the TT program.  Then they enter the results onto Form 3800 in the TT program.  The tax return can only be printed and mailed since the 3468 has to be attached to the tax return.
For the form 3800 - Enter 3800, general business credit in the Search/Find box.  Enter the result from the 3468 on Line 4a of the 3800.  Check if Passive.

Solar tax credit

Ok, Thanks

Carl
Level 15

Solar tax credit

Yeah, the terminology of "energy tax credits" with business income is what was throwing me and a few of my colleagues. Once someone caught the "play on words" and identified it as "business tax credit" that just so happens to include energy credits among other things, that got us on the right track. But the derailment was a close call there!

 

Solar tax credit

Thanks for the verified info. This is really useful knowing that rental units are also able to make a claim. Previously I thought such tax offsets only apply to homeownerships. Regardless of the amount, every single tax claims plays a part in yearly payments.

joe12pack
New Member

Solar tax credit

wait I'm totally confused. Can we or can we not take the 30% credit on a residential rental property that had solar installed on it? Seems like the professor is correct but someone is saying he is wrong but the last message from CameronRobertson says we can take it after all? 

ThomasM125
Employee Tax Expert

Solar tax credit

A 30% credit is available for businesses for investment in solar equipment, but it is not the same as the residential renewal energy tax credit.

 

You can read more about it here:

 

https://www.irs.gov/pub/irs-pdf/i3468.pdf

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joe12pack
New Member

Solar tax credit

A residential rental property is a business and does meet this criteria:

 

Line 12b

2. Equipment that uses solar energy to:
a. Generate electricity

 

 

KrisD15
Employee Tax Expert

Solar tax credit

What form are you referring to? 

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iOne
Level 4

Solar tax credit

Form 3468 leads to Form 3800.

See:

https://ttlc.intuit.com/community/state-taxes/discussion/re-can-a-trust-claim-a-solar-tax-credit/01/...

 

The best guide I've found is:
https://www.thetaxadviser.com/newsletters/2017/oct/credit-residen[product key removed]s.html

https://recsolar.com/blogs/calculate-solar-tax-credit-2020/

 

"Business credit

While Sec. 25D does not allow a solar tax credit for the cost of installing solar panels for use in residential rental property, Sec. 48 is more favorable. Sec. 48 provides for a solar energy tax credit for the installation of solar panels as part of the general business credit under Sec. 38. Under Sec. 48(a)(5)(D)"

"Sec. 48(a)(3)(A)(i) defines equipment that uses solar energy to generate electricity or to heat or cool a structure as energy property, as long as it is not used to heat a swimming pool."

quadfin
New Member

Solar tax credit

Not saying you *should* do it - but here is how to do it.

You will need to state a Business Investment Credit for solar energy production

- in TT open the list of forms

- enter 3468, then open it

- on the 3468 smart worksheet, line C2 (calculation for line 12c) enter the cost of your solar system

- the % credit will be calculated and will flow to lines 12c & 14

- forms 3800, 3800 Pt 3 will be added and populated

- review the forms, make sure they reflect your intent

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