[RE-wrenches] does the federal grant affect depreciation?

[David Brearley]

Dana,

Here is an excerpt from the latest SEIA tax manual that supports the
information from Randy:

³1.6.2 Basis Reduction‹The owner of solar equipment on which an investment
credit is claimed or on which a cash grant is paid by the Treasury can
depreciate only 85 percent of the cost. The Œbasis¹ for depreciation must be
reduced by half the amount of the investment credit or cash grant.²

Best regards,

David Brearley, Senior Technical Editor
SolarPro magazine 
NABCEP Certified PV Installer 


On 9/30/09 2:11 PM, "Dana Brandt" <dana at ecotechenergy.com> wrote:

> Thanks, Randy. Do you have a reference for the depreciable basis being reduced
> by half the tax credit? I've emailed the treasury dept. and will report back
> what I hear from them.
> 
> Dana
> 
> 
> Dana Brandt
> Ecotech Energy Systems, LLC
> www.ecotechenergy.com <http://www.ecotechenergy.com>
> dana at ecotechenergy.com
> 360.510.0433
> 
> 
> On Tue, Sep 29, 2009 at 8:39 PM, Randy <randy at positiveenergysolar.com> wrote:
>> Dana,
>> 
>> Federal depreciation rules establish depreciation  or the depreciable basis
>> based on the system cost reduced by half of the tax credit. The federal grant
>> is ³in lieu² of the tax credit therefore I am fairly certain that treatment
>> should be the same as taking the tax credit. 
>> 
>>  
>> 
>> However, I couldn¹t readily find a definitive answer and it was not covered
>> in the SEIA webinar.  If you cant get an affirmative response then email the
>> treasury department at 1603Questions at do.treas.gov. 
>> 
>>  
>> 
>> Randy
>> 
>>  
>> 
>> Randy Sadewic
>> 
>> Positive Energy
>> 
>>  
>> 
>> Office: 505 424-1112
>> 
>> Cell:    505 570-0137
>> 
>> From: re-wrenches-bounces at lists.re-wrenches.org
>> [mailto:re-wrenches-bounces at lists.re-wrenches.org] On Behalf Of Dana Brandt
>> Sent: Tuesday, September 29, 2009 5:33 PM
>> To: RE-wrenches
>> Subject: [RE-wrenches] does the federal grant affect depreciation?
>> 
>>  
>> 
>> Wrenches,
>> 
>> I feel like this must have been discussed before, but I can't find it in the
>> archives. 
>> 
>> If a business takes the 30% federal grant, do they get to depreciate 100% of
>> the system cost, or just the remaining 70%?
>> 
>> Thanks,
>> 
>> Dana
>> 
>> 
>> Dana Brandt
>> Ecotech Energy Systems, LLC
>> www.ecotechenergy.com <http://www.ecotechenergy.com>
>> dana at ecotechenergy.com
>> 360.510.0433
>> 
>> _______________________________________________
>> 
>> 
> 




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