Federal tax credit?

[LucMan]

I already have a 5.2 KW PV system that was installed in 2007. I would like to add another 3kw system at the same address.
Does any one know if I can get the 30% tax credit on the additional system?
Thanks

[inetdog]

IMHO, yes. As long as you go through the whole permit process, as required locally, including updating your interconnect agreement with POCO.

[solarz]

What if installation and all is done (you've even PAID your installer IN FULL in 2016) but your interconnect cannot actually be ....... COMPLETED until 2017? Do you still have the ability to claim the 30% tax credit?

My understand is the system must be fully operational before the end of the year (12/31/2016). Without interconnection approval, it is not considered operation system. You can check with your tax consultant or accountant before doing so.

[ulrich]

I am waiting on him to let me know his understanding but my "A-Type" personality doesn't like to wait on others thus my inquiry. Appreciate your comment. It would be interesting to hear others as well.

I guess the KEY point here is that the IRS rules don't actually say "Operational". The say "placed in service". There IS a difference. Even your point says "interconnect APPROVAL". Not interconnect COMPLETED. If interconnect has been "APPROVED" but the connection team can't get to the property due to all the other connections they have backlogged then... It may well be possible to get an interconnect "approval" prior to the deadline and yet not have the system energized, right?

I think you're trying to split hairs here. From what I can find in terms of references, placed in service and operational are pretty much synonymous.

For example see the following reference:

http://smartenergy.illinois.edu/pdf/Archive/seiataxmanual.pdf

Equipment is considered "placed in service" in the year it is capable of being used by
the taxpayer for its intended purpose. Four things must ordinarily have happened for
this to be true:
· The equipment must have been delivered and physical construction or
installation on site must have been completed, although contractor personnel can
still be at the site in support of startup and maintenance and completion of minor
tasks like painting and attending to punchlist items.
· The taxpayer must have taken legal title and control of the equipment.
· The taxpayer must have the licenses and permits needed to operate it.
· Pre-operational tests must have demonstrated that the equipment can serve its
intended function. (Other testing to determine whether the equipment can
operate at the design capacity and to identify and eliminate defects can occur
after the equipment is in service.)

[cebury]

FWIW, most probably nothing, two installers told me it has to pass inspection to be considered placed in service, not turned on with the utility.

It is splitting hairs and right now the only one it matters to is you (and your pocketbook). But it also matters not to an IRS auditor that "that guy on the internet told me someone told him".

The irs still has not clarified whether unclaimed portions of the deduction can rollover to following years even if placed in service prior to 2016. The vagueness is unfair, but it is the inefficiency of written communication that will never cover all the ifs, ands and buts. And because they're the irs and they don't have to.

[ndabunka]

FWIW, most probably nothing, two installers told me it has to pass inspection to be considered placed in service, not turned on with the utility.

It is splitting hairs and right now the only one it matters to is you (and your pocketbook). But it also matters not to an IRS auditor that "that guy on the internet told me someone told him".

The irs still has not clarified whether unclaimed portions of the deduction can rollover to following years even if placed in service prior to 2016. The vagueness is unfair, but it is the inefficiency of written communication that will never cover all the ifs, ands and buts. And because they're the irs and they don't have to.

Thank you for your well written response.

[ulrich]

Thank you for your well written response. That is the same as we are being told. We do have a CPA and he is checking into the details as well.

If you want to do more research, Google "irs placed in service energy credit" - among other results, you'll see published cases where the IRS rendered opinions on whether various projects should be considered "placed in service". There is apparently a process through which one can request a ruling. See, for example: http://www.cohnreznick.com/renewable...date-wind-farm

I couldn't find a ruling for a solar project that seemed applicable to your situation, but I imagine the definition for "placed in service" is likely consistent enough that you may find some guidance in rulings on other types of renewable energy projects.

For me, this is enough of a borderline case that I would wait for your CPA's input before making any decisions.

[cebury]

I could've swore there was more to this thread as I replied earlier today talking about the five consideration factors for placed In service. Was there a system reset since my post history doesn't show it either?

[paul65k]

I could've swore there was more to this thread as I replied earlier today talking about the five consideration factors for placed In service. Was there a system reset since my post history doesn't show it either?

It's called Solar Panel Talk's Idea of moderation......when certain moderators disagree with other peoples opinions they just delete.........it's a bit of a game trying to remember what WAS there but the good news is that this is a way to help improve your memory.............read this one fast cuz it will probably be gone soon as well

I am actually a moderator on a couple of different forums and while moderation CAN be an important tool, over moderation is a sure fire way of throwing a forum's credibility down the drain......especially when it is justified in someone's mind when it disagrees with their own personal beliefs.......on a scale of 1-10 10 being the worst, I give this forum a 6.....not too far past center but certain moderators have gusts to 8 from time to time

[ndabunka]

My understand is the system must be fully operational before the end of the year (12/31/2016). Without interconnection approval, it is not considered operation system. You can check with your tax consultant or accountant before doing so.

It will not matter in our case as it appears that we WILL have ours connected to the power company prior to year end. However, based on the NC document I published "Operational" is the ability to show that the installed system can output power (e.g. voltage from inverter). This was input from my personal CPA as he agrees that the verbiage (in THAT particular document) indicated that connection to your provider is not needed to demonstrate that ability. Hope this helps others that may find themselves in that position at the end of the year who may be checking this thread.

I am not a CPA nor lawyer so this information is worth EXACTLY what you pay for it... $0.00. YMMV

EXACT VERBIAGE...
"Placed in Service. The tax credit is allowable only to a person that places the renewable energy property in service. Renewable energy property is considered to be placed in service when it is installed and is producing usable energy. For renewable energy property used for a business purpose, the property must produce usable energy that is for sale or is used for another business purpose."

[cebury]

It will not matter in our case as it appears that we WILL have ours connected to the power company prior to year end. However, based on the NC document I published "Operational" is the ability to show that the installed system can output power (e.g. voltage from inverter). This was input from my personal CPA as he agrees that the verbiage (in THAT particular document) indicated that connection to your provider is not needed to demonstrate that ability. Hope this helps others that may find themselves in that position at the end of the year who may be checking this thread.

I am not a CPA nor lawyer so this information is worth EXACTLY what you pay for it... $0.00. YMMV

Thanks for the update.

[ndabunka]

It's called Solar Panel Talk's Idea of moderation......when certain moderators disagree with other peoples opinions they just delete.........it's a bit of a game trying to remember what WAS there but the good news is that this is a way to help improve your memory.............read this one fast cuz it will probably be gone soon as well

I am actually a moderator on a couple of different forums and while moderation CAN be an important tool, over moderation is a sure fire way of throwing a forum's credibility down the drain......especially when it is justified in someone's mind when it disagrees with their own personal beliefs.......on a scale of 1-10 10 being the worst, I give this forum a 6.....not too far past center but certain moderators have gusts to 8 from time to time

This one wasn't mods but rather was (likely) due to my edits. I removed all the "speculation" embedded in my individual posts and replaced those ruminations with actual hard copy documents.

[paul65k]

This one wasn't mods but rather was (likely) due to my edits. I removed all the "speculation" embedded in my individual posts and replaced those ruminations with actual hard copy documents.

Thanks for that comment...............I do stand by my statements though to moderation of forums in general. I remember the first time I had "Mod" power I was working hard to make that forum what I thought it should be and get rid of all the rif raf.....the reality hower is that the value of a forum is to be a place for many opinions and not just those of the mainstream..............that being said you got to manage it too and this is the fine line that many struggle with. I believe in giving them as much rope as possible without diminishing the overall value of the forum. The one thing I have learned over the years is that most if not all forums self moderate to a large extent as the true "Idiots" always seem to expose themselves over time....................even if one of those people turn out to be a "Mod"

Keep up the good work everyone this place is a cornucopia of knowledge that you can't find in may other places

[adamt12]

need to roll over credit

Hi, New to this forum. If i install a system this year ( i am getting doubtful that that will happen ) and i need 3 years to roll over the tax credit, ( i know you are not accountants but figured i would ask in case someone already researched this )will i be able to roll over into 2017? Also, similar to poster, if my system is paid for but not in service for 2015, will i still be able to claim it for my 2015 taxes? Does the IRS really check for full operation? I am not looking to play any games but if i can't use 2015 for my first years credit, and i know i need at least 2 years to reap the benefits of the credit, i am doubtful i will pull the trigger on my system.
thanks

[cebury]

Hi, New to this forum. If i install a system this year ( i am getting doubtful that that will happen ) and i need 3 years to roll over the tax credit, ( i know you are not accountants but figured i would ask in case someone already researched this )will i be able to roll over into 2017? Also, similar to poster, if my system is paid for but not in service for 2015, will i still be able to claim it for my 2015 taxes? Does the IRS really check for full operation? I am not looking to play any games but if i can't use 2015 for my first years credit, and i know i need at least 2 years to reap the benefits of the credit, i am doubtful i will pull the trigger on my system.
thanks

You will not get a firm answer from anyone on that point, unless something has changed recently where the IRS issued a specific letter ruling or determination but I've checked several free sites that do not list anything new.

According to IRS Code § 25D - Residential energy efficient property

(c) Carryforward of unused credit
If the credit allowable under subsection (a) exceeds the limitation imposed by section 26 (a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.

It doesn't clearly designate carrying forward past the expiration date of the Investment Tax Credit that will expire if placed in service after Dec 31 2016. However, it also doesn't clearly disallow it -- it just says "shall be carried to the succeeding taxable year". Usually if no official determination is made, and an audit is performed and decides to challenge the credit, it is up to the taxpayer to make a case to the auditor for interpretation based on his tax return. Successful cases are usually based on precedents from other sections of code or rulings regarding similar credits for renewable energy or some other relevant code section or determination. Whether you're successful or not can depend on any number of things, including what the auditor "had for lunch" if you're of that view of IRS auditors. You can also spend the time/money to contest it further.

I would think this will become a more public issue once 2016 taxes are due, requiring a more general revenue ruling or what not.

Your question is very different from the above Placed in Service question which has some precedent in other IRS sections relating to renewables ("ready and available for its specific use"), and a private letter ruling (though non-binding to anyone other than the private letter ruling was issued to) wherein there were 5 stated consideration factors to determine placed in service.