MACRS depreciation + tax credit on a residential system w/ home office?

[HX_Guy]

Coming out of the gate here with a lot of questions. I was advised on another forum to look into MACRS depreciation on a solar system because we have our own business which we run from home. I've looked a little online but haven't found much info and not sure if our accountant knows much about it (they haven't gotten back to me yet).

Anyone have info on this? Could there be a potential tax benefit under the Modified Accelerated Cost Recovery System? Additionally, I know there is a 30% federal tax credit on residential systems but there is also a 30% for businesses. Do both of those need to be claimed or how does that work?

[JohnInSoCal]

I don't know for sure but I have a feeling it would be difficult to pull off because generally for tax purposes you can only write off a percentage of the house that is used for home office. This is what I do, basically one bedroom is my office so I write off on a percentage basis the utilities used just for that room. So I would assume you need to do the same thing for solar. I would run this by 2 or 3 different tax guys to be sure on something like this before getting into hot water with the IRS

[prhamilton]

Or just do a prepaid lease and let the leasing company do the depreciation.

[HX_Guy]

I don't know for sure but I have a feeling it would be difficult to pull off because generally for tax purposes you can only write off a percentage of the house that is used for home office. This is what I do, basically one bedroom is my office so I write off on a percentage basis the utilities used just for that room. So I would assume you need to do the same thing for solar. I would run this by 2 or 3 different tax guys to be sure on something like this before getting into hot water with the IRS

Yeah, that's how I understood it to work as well from the little info I found online. I asked my accountant and she didn't really know, said she had no experience with it.

But basically, if I understand it correctly, you would take the percentage of your house that you use for business (and we use an honest 20-25%) so if a system is $40,000 let's say, then you could depreciate $10,000 over 5 years.