Managing Investment Tax Credits -- Seeking Advice
Howdy internet,
i'm pretty new to the real estate game and am hoping to get some advice.
I have a few properties on which we are doing a solar install.
These will generate a federal tax credit via the Investment Tax Credit program.
I'm not sure what to do with these credits -- we won't really generate enough profit this year to take advantage of everything.
Anyone have experience with these things?
Most Popular Reply
- Tax Strategist | CPA, MBA + Wharton FP&A | CFO-Level Planning
- Houston, TX
- 172
- Votes |
- 156
- Posts
It actually works in reverse for rentals. Since these are rental properties, the credit here is the business solar credit (generally 30 percent for systems under a megawatt), and it lands as a passive activity credit. That means it offsets tax on your rental income, not your W-2 income. Good thing is that unused credit carries forward indefinitely until the rentals produce taxable income or the classification of the activity changes. And once credit does become usable, clean energy credits can reach back 3 years and forward 22.
- Julius Vincent
- [email protected]
- 281-407-7353
