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<DIV><FONT face=Arial size=2><SPAN class=031035218-25022009>Hi
Wrenches,</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN class=031035218-25022009>I have what i feel
is a serious tax issue in New Mexico that just recently came to my attention.
Any help on this would be appreciated. Here are the
facts.</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN
class=031035218-25022009></SPAN></FONT> </DIV>
<DIV><FONT face=Arial size=2><SPAN class=031035218-25022009>The major utilities
in New Mexico have instituted programs that buy the Solar REC (Renewable Energy
Certificates) from the system owner at a fixed rate over a fixed term. THis is
in addition to net metering. In our region the REC is 13 cents per kWh for
all of the solar production. A separate utility grade meter tracks
the system production and once a month your normal utility bill is offset
by this credit and if the balance is less than zero then you get a
check. </SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN
class=031035218-25022009></SPAN></FONT> </DIV>
<DIV><FONT face=Arial size=2><SPAN class=031035218-25022009>The
major utility has decided that for homeowners or businesses
that generate REC credits totalling $600 or more, a 1099 tax
form is issue reporting the earnings to the IRS as miscellaneous income.
The utility is asking for a IRS ruling on this.</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN
class=031035218-25022009></SPAN></FONT> </DIV>
<DIV><FONT face=Arial size=2><SPAN class=031035218-25022009>In my opinion, any
income producing property that generates income that is taxed should
correspondingly allow that asset to be treated as a business
asset that can be depreciated. For businesses, this is not an issue
because the asset is normally depreciated, but for homeowners, it is unfair to
tax the income without allowing depreciation on the asset. Implicitly, the way
the federal tax credit form works, it is not treated as a business asset since
the form is different that the form used for businesses claiming the tax credit.
</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN
class=031035218-25022009></SPAN></FONT> </DIV>
<DIV><FONT face=Arial size=2><SPAN class=031035218-25022009>I would expect this
to become a bigger issue as more utilties offer this program to meet their
RPS requirement. </SPAN></FONT><FONT face=Arial size=2><SPAN
class=031035218-25022009>Can anyone shed light on this
issue?</SPAN></FONT></DIV>
<DIV><SPAN class=031035218-25022009><FONT face=Arial
size=2>THanks,</FONT></SPAN></DIV>
<DIV><SPAN class=031035218-25022009><FONT face=Arial
size=2>Randy</FONT></SPAN></DIV>
<DIV class=Section1>
<P class=MsoNormal dir=ltr align=left>Randy Sadewic<?xml:namespace prefix = o ns
= "urn:schemas-microsoft-com:office:office" /><o:p></o:p></P>
<P class=MsoNormal>randy@positiveenergysolar.com<o:p></o:p></P>
<P class=MsoNormal>NABCEP Certified PV Installer</P>
<P class=MsoNormal>Positive Energy, Inc.<o:p></o:p></P>
<P class=MsoNormal>Phone 505 424-1112<o:p></o:p></P>
<P class=MsoNormal>Cell 505 570-0137</P>
<P class=MsoNormal>Fax<SPAN style="mso-spacerun: yes">
</SPAN>505 424-1113<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal><SPAN style="COLOR: red">Enjoy the Sun!<o:p></o:p></SPAN></P>
<P class=MsoNormal><o:p> </o:p></P></DIV>
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