Will I get tax credit if I installed solar prior to closing of my house?

[dannieboiz]

Purchased the home from a family already moved in and loan is locked. We're just waiting for closing in the next 3 weeks or so...

If I proceed with my solar contract and assume they complete the install before I close escrow, legally the home is not mine yet. Can I still claim the tax for it?

[inetdog]

Purchased the home from a family already moved in and loan is locked. We're just waiting for closing in the next 3 weeks or so...

If I proceed with my solar contract and assume they complete the install before I close escrow, legally the home is not mine yet. Can I still claim the tax for it?

That is a question for a CPA or tax attorney. Do not trust any other advice you get on this forum about the question!

[solar_newbie]

Purchased the home from a family already moved in and loan is locked. We're just waiting for closing in the next 3 weeks or so...

If I proceed with my solar contract and assume they complete the install before I close escrow, legally the home is not mine yet. Can I still claim the tax for it?

Why make thing complicated ? Just install once it is closed. 3 weeks is not a long time.

[dannieboiz]

Why make thing complicated ? Just install once it is closed. 3 weeks is not a long time.

trying to make sure I get system up and running fully paid for by dec 31st.

[solar_newbie]

trying to make sure I get system up and running fully paid for by dec 31st.

Oh let say you get the house 4 weeks from now --> end of Oct.
Then installation take place --> Max 2 weeks to get everything completed include permit.
You have 6 weeks for your Power company to sign off.

For tax credit, I assume once you fully paid (at the end of the city sign off), you are done.

[foo1bar]

trying to make sure I get system up and running fully paid for by dec 31st.

The seller is probably not going to let you do work to the house before closing. (I wouldn't)

I would get bids, sign a contract, get everything lined up (permits, POCO permit/agreements), and set a start date for the installers starting work that is a day after closing.
If your closing is in 3 weeks, then the installer has >8 weeks to get everything done. I would expect him to be able to get it done in between 1-3 weeks depending on how long it takes your POCO and city/Authority-Having-Jurisdiction to do stuff. 1 week if those guys are fast, 3 if they're slow. But the installer should be able to give you a good estimate on timeline.

[foo1bar]

For tax credit, I assume once you fully paid (at the end of the city sign off), you are done.

I believe it is as of when the item is "placed in service" -
And if the POCO hasn't signed off and therefore you can't use it, quite possibly the IRS could say it was not yet placed in service.

HOWEVER
I don't see this in the IRS code.
I believe the relevant section is https://www.law.cornell.edu/uscode/text/26/25D

The IRS uses the language "placed in service" in this:

http://www.irs.gov/irb/2013-47_IRB/ar09.html

But I'm not sure that's binding.
And I think it's not exactly the same question. so there's probably a better citation that should be used.

But I would NOT take my word for it.

If it actually mattered to me, I'd get the opinion from a tax preparer and use them to prepare my taxes.
In this case, I don't think it will actually matter for the OP - it seems likely they'll finish everything before Dec. 31 - they just need to make sure they stay on top of things.

[cebury]

+1 foo1bar

Yeah the hard part is going to be getting permission from the seller to do any work. Heck, they may not allow your solar installer to open your electrical panel to see if it needs upgrade or go on the roof for a roof measure, survey or shading estimate. These things are not related to normal business conducted during the escrow process. But if they give you auth /shrug.

As others have stated, it is very unlikely to get solar installed and POCO authorized in 3 weeks anyway.

If you are risk averse, a careful personality and willing to spend the dough to get a real answer you wouldn't want an H&R block interpretation (no offense to their role in tax prep). You want consultation from a higher up the tax preparation chain. Those types don't do anything verbally, they'll take your question and give you a response in writing. You can ask their help in case the IRS audits you and tries to deny the deduction. "Consult your tax attorney" quite often means $$$ as it's not an easy answer. And there are many cases where there is no black/white answer, it depends on how aggressive the auditor is. Until it gets decided in tax court for precedence and they issue a clarification.

[dannieboiz]

actually my situation is strange. I bought the house that I'm living in for the past year from a family so I can do whatever i want with it... expecting to close on the 21st, I signed contract today engineer is going to be doing a final site survey next week.

I called my cpa and confirmed that this is fine because the contract is under my name and paid for by me installed at the house that I bought/buying.

But regardless, by the time I have somebody on my roof, I would have legally own the house already.

[8.4]

It's a big investment. I'd wait until I have ownership. I don't know what kind of state credits there are, but the federal credit lasts until end of 2016. People do weird things over money, but obviously you know the family best.