Off grid, tax credit ?

[Brian53713]

I have heard some off-grid applications are tax deductible. Does anyone know the facts whether the off-grid materials qualify?
And to what extent, every single item?

[organic farmer]

I have heard some off-grid applications are tax deductible. Does anyone know the facts whether the off-grid materials qualify?
And to what extent, every single item?

You need to speak with your accountant.

Your tax filing will be different from anyone else' tax filing. They are all completely customized. No two tax filers will be the same.

The IRS allows solar power systems and solar thermal systems to be depreciated over 7 years.

We are depreciating our solar power system.

It depends mostly on what type of business activity you are doing. I am a military retiree, and I am currently an organic farmer. As a farmer I can not swing a dead cat without hitting yet another tax deduction. Nearly everything I own is deductible in some manner.

You need to review this with your tax preparer.

[foo1bar]

You need to speak with your accountant.

I agree.
OP: Don't follow this guys advice (nor mine).
Use it as starting point for doing your own research.

The IRS allows solar power systems and solar thermal systems to be depreciated over 7 years.

IF and ONLY IF it is a business use.
I believe that most off-grid applications are personal residence uses.
And therefore no depreciation.
BUT they do get to put the whole system (modules, controllers, wiring, batteries, installation) onto form 5695 and get the 30% tax credit.
I wouldn't try to count the cabin that you mount the things on top of as part of the system - since that isn't it's primary purpose. But my (layman's) understanding is all the equipment that's part of the solar install can be included.

[J.P.M.]

Strongly with foo1bar on this one. See your accountant.

Organic Farmer: Stop with the depreciation business. You've stated such things several times now and its been commented on by several posters, including me.

Alternate energy and R.E. additions are depreciable for tax purposes as a business expense.
Such tax breaks are not available in a simple residential or other non business applications.
You, apparently, are a farmer. That is a business.
Solar applications are depreciable as a business expense to you. Amen.

Most of us are not farmers.

To continue writing that solar equipment is depreciable for non business applications, that is, strictly residential applications, is incorrect, looks kind of parochial, and perhaps bordering on the deceptive.

[organic farmer]

Strongly with foo1bar on this one. See your accountant.

And I think I have said the same thing. So you agree with me, excellent.

... Organic Farmer: Stop with the depreciation business. You've stated such things several times now and its been commented on by several posters, including me.

Alternate energy and R.E. additions are depreciable for tax purposes as a business expense.

Right?

I agree.

... Such tax breaks are not available in a simple residential or other non business applications.
You, apparently, are a farmer. That is a business.

I have never owned a home that was not a business. This is my fifth home.

... To continue writing that solar equipment is depreciable for non business applications, that is, strictly residential applications, is incorrect, looks kind of parochial, and perhaps bordering on the deceptive.

Hmm, I have NEVER stated that the depreciation is for any non-business use.

I have not meant to be deceptive.

My apology, if it came across as being ?deceptive?



If you home is not a business, how does it pay for itself? What money do you earn from owning it? How can you justify owning a huge debt if there is no write-off and tax-sheltering?

[Brian53713]

Sorry to start the controversy, but both sides makes sense. I appreciate the tips on if I'm running some sort of business, in the American way, from home. Does anyone have personal experience, with the inverter charger combo, anything DC related qualifying for 30 % tax credit . What is the fine line for what qualifies for renewable energy, off-grid solar applications.

[foo1bar]

If you home is not a business, how does it pay for itself? What money do you earn from owning it? How can you justify owning a huge debt if there is no write-off and tax-sheltering?

For the *vast* majority of people the house they live in does not earn money for them.
Even for most farmers the house is a separate building and does not earn money by owning it.

Most people who have a mortgage on their house are able to write off the interest as a schedule A deduction.

[foo1bar]

Does anyone have personal experience, with the inverter charger combo, anything DC related qualifying for 30 % tax credit . What is the fine line for what qualifies for renewable energy, off-grid solar applications.

Well, I plan to put on form 5695 the solar-powered skylight I'm having installed.

http://www.veluxusa.com/help-and-advice/tax-credit

That's technically an off-grid solar application.

I'd search "off grid 5695" for what other people have written across the web.

[J.P.M.]

The IRS allows solar power systems and solar thermal systems to be depreciated over 7 years.

We are depreciating our solar power system.

It depends mostly on what type of business activity you are doing. I am a military retiree, and I am currently an organic farmer. As a farmer I can not swing a dead cat without hitting yet another tax deduction. Nearly everything I own is deductible in some manner.

As part of a business, I'm sure you are allowed by law, depreciation. . But, my point - no business - no depreciation.

Again, the depreciation is allowed for a business. IMO, making a blanket statement, without qualification, either stating or implying that the IRS allows depreciation for ANY application of solar PV is, IMO, at best, a sloppy statement. Not everyone is a farmer, or has a home business.

In general, residential solar, which sounds like what the OP's question was in reference to, is not considered a depreciable expense for a residence that is used exclusively as a home (not as, for example, a dual purpose property may have some expenses eligible for depreciation).

If the home or some portion of the home is associated with what qualifies as a business, and then I'd suggest other known and accepted methods of allocating what proportion of the expense is depreciable are well established, as you are probably well aware.

The expense of PV on a home that's owned by the resident, with the system owned by the resident, and that's used exclusively as a home (or, a vacation home) is, as far as I know, not depreciable. I think that covers a majority of residences in the U.S.

[J.P.M.]

As far as I know, off grid solar is eligible for the federal tax credit. IRS form 5695 and its instructions do not state grid tie as a requirement for eligibility. The instructions also state that houseboats and RV's qualify as residences. A lot of such dwelling are probably not grid tied.

Not a lot of info, but it seems a consensus might be that the system needs solar panels to qualify for the federal tax credit, as, for example, foo1bar's solar powered skylight.

More of the same advice. Call a tax professional, or the IRS - the two perhaps being mutually exclusive.

[inetdog]

Replacing a local generator (in part) with solar is promoting alternate energy just as much as grid tie is.

[SunEagle]

Replacing a local generator (in part) with solar is promoting alternate energy just as much as grid tie is.

I guess it comes down to the definition of what the alternate energy source is replacing?

I presume that if the generator was burning straight diesel or gasoline it would, but if it was bio-diesel, gasohol or some other renewable fuel would it get the same tax credit?

[azdave]

I have NEVER stated that the depreciation is for any non-business use.

But you next to NEVER state up front that the depreciation is for a business. It is usually a few post later when readers ask how you depreciate a residential system that you reveal it's for a business. I've seen you do that many times and don't understand why you don't just say you have a business use in your first post.

[organic farmer]

But you next to NEVER state up front that the depreciation is for a business. It is usually a few post later when readers ask how you depreciate a residential system that you reveal it's for a business. I've seen you do that many times and don't understand why you don't just say you have a business use in your first post.

Okay thank you. That was not my intent.

This is our fifth home, and so far we have never owned a home that was not a business. I will try to remember to state this up-front.

[Starmie]

While grid connected homes now have a 30% tax rebate on all new solar installations in the recent Bailout Bill, off-grid homes are harder to finance. There is no cap on the size of the solar installation so wealthy grid-tied homeowners will receive the biggest subsidy.