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posted Apr 19, 2021 9:03:45 AM

Will paying off our solar panels due to sale of home make the/ this deductible?

We were paying for them monthly, but due to the sale, we had to pay them off in full to complete the sale....

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2 Replies
Level 15
Apr 19, 2021 9:12:08 AM

the cost of your solar panels, reduced by the tax credit you got, adds to the cost basis of the property.  Thus your gain on sale will be less. it is not a deductible expense. 

Level 15
Apr 19, 2021 9:50:14 AM

You were eligible to take a tax credit for installing the solar panels, based on the contract price, as of the day they were "placed in service" (installed, inspected, and turned on), even if you had not fully paid for them at at time.  If you did not take this credit, you need to go back and file an amended tax return for the year the solar panels were installed.

 

The net cost of the solar panels (after subtracting any federal and state tax credits or utility company incentives and rebates) is added to the cost basis of your home and may reduce your capital gains tax when you sell.

 

Anything else (interest on payments or paying off early) is not a tax deduction, credit or adjustment.