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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29535
Experience:  Taxes, Immigration, Labor Relations
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Thanks interest. How would it take you to put something

Customer Question

Thanks for your interest. How long would it take you to put something together? I don't want to make this too complicated. Here's the gist: I did a roof/solar project for a friend. He built 5 units (two buildings) and he lives in one unit. The solar cost was approx 55,000 and I told him he would qualify for a 30% Fed Tax Credit (approx 16,500) however, according to my accountant, he only qualifies for the 30% on the unit that he lives in (so only approx 3,300 - 55000 divided by 5 = 11000 x 30% = 3300). He still owes me about 7k on the project (we just finished everything). So we're trying to figure out what to do. He's not happy that he is getting a 3300 credit instead of 16500. Just need someone with expertise to dig a little further to see if there are any other incentives or tax strategies that he can use to take full advantage of his solar installation and to help with the credit difference (my accountant is too expensive and too busy). I just wanted to give him a simple spreadsheet with some alternatives he could explore. For example: is accelerated depreciation available?, any other solar tax credits or tax strategies, etc? I don't want to really explore them for him but just present a simple spreadsheet with some options he could look into (if any). If you're interested, how long would this take you and how soon could you have something.? Need it pretty soon. Sorry for the long message.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Unfortunately - you are correct.

Expert:  Lev replied 1 year ago.

30% federal tax credit for solar systems on residential (under Section 25D) is NOT allowed for installing solar power at rental properties...

The only exemption from this rule - if you live in the property but use it as rental while you away.

So this credit will be ONLY allowed for the unit he is using as personal dwelling.


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