Steal This Property: Summary of Energy Tax Credits

Steal this property...
Play with me. How better to spend our leisure time than to hear the news of how our lot value has climbed? Those of us who still have some discretionary savings to play around with are a rare commodity these days. I don’t like paying the government a nickel more than necessary. And therefore, the news of exciting tax saving tips and estate planning strategies keeps my accountant refreshed with plenty of challenges.
Has anyone rewarded themselves with a delicious energy investment tax credit recently? This past few months have heard so many tragedies on the Wall Street that we may have missed some of the juicy tax incentives inspired lawmakers have hidden inside the housing rescue bill. For instance, an extension of solar and wind energy investment tax credits… and removal of the caps...boosting yield rates through the roof. Ask your accountant about the following matter of fact, courtesy of Michael Shore of FLS Energy, Inc., Black Mountain, NC:
HR 1424 - Summary of Renewable Tax Provisions
Summary of Solar Provisions
Extension. Extend for 8 years the 30-percent tax credit for both residential and commercial solar installations
Removal of Cap. Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent credit
Utilities. Eliminate the prohibition on utilities from benefiting from the credit
AMT. Allow Alternative Minimum Tax (AMT) filers, both businesses and families, to take the credit

Title III. Tax Provisions
Division B: Energy Improvement and Extension Act of 2008 - Energy Improvement and Extension Act of 2008 - Title I: Energy Production Incentives - Subtitle A: Renewable Energy Incentives - (Sec. 101) Extends through 2009 the tax credit for producing electricity from wind and refined coal facilities. Extends through 2010 such tax credit for other facilities, including closed and open-loop biomass, solar energy, small irrigation power, landfill gas, trash combustion, and hydropower. Modifies rules for and definitions of refined coal, trash and biomass facilities, and hydropower production.

SEC. 103. ENERGY CREDIT

(a) Extension of Credit-
(1) SOLAR ENERGY PROPERTY- Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each amended by striking `January 1, 2009' and inserting `January 1, 2017'.
(2) FUEL CELL PROPERTY- Subparagraph (E) of section 48(c)(1) is amended by striking `December 31, 2008' and inserting `December 31, 2016'.
(3) MICROTURBINE PROPERTY- Subparagraph (E) of section 48(c)(2) is amended by striking `December 31, 2008' and inserting `December 31, 2016'.
(b) Allowance of Energy Credit Against Alternative Minimum Tax-
(1) IN GENERAL- Subparagraph (B) of section 38(c)(4), as amended by the Housing Assistance Tax Act of 2008, is amended by redesignating clause (vi) as clause (vi) and (vii), respectively, and by inserting after clause (iv) the following new clause:
`(v) the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48,'.
(2) TECHNICAL AMENDMENT- Clause (vi) of section 38(c)(4)(B), as redesignated by paragraph (1), is amended by striking `section 47 to the extent attributable to' and inserting `section 46 to the extent that such credit is attributable to the rehabilitation credit under section 47, but only with respect to'.
(c) Energy Credit for Combined Heat and Power System Property-
(1) IN GENERAL- Section 48(a)(3)(A) is amended by striking `or' at the end of clause (iii), by inserting `or' at the end of clause (iv), and by adding at the end the following new clause:
`(v) combined heat and power system property,'.
(2) COMBINED HEAT AND POWER SYSTEM PROPERTY- Subsection (c) of section 48 is amended--
(A) by striking `Qualified Fuel Cell Property; Qualified Microturbine Property' in the heading and inserting `Definitions', and
(B) by adding at the end the following new paragraph:
`(3) COMBINED HEAT AND POWER SYSTEM PROPERTY-
`(A) COMBINED HEAT AND POWER SYSTEM PROPERTY- The term `combined heat and power system property' means property comprising a system--
`(i) which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),
`(ii) which produces--
`(I) at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and
`(II) at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),
`(iii) the energy efficiency percentage of which exceeds 60 percent, and
`(iv) which is placed in service before January 1, 2017.
`(B) LIMITATION-
`(i) IN GENERAL- In the case of combined heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the credit under subsection (a)(1) (determined without regard to this paragraph) for such year shall be equal to the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property.
`(ii) APPLICABLE CAPACITY- For purposes of clause (i), the term `applicable capacity' means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.
`(iii) MAXIMUM CAPACITY- The term `combined heat and power system property' shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.
`(C) SPECIAL RULES-
`(i) ENERGY EFFICIENCY PERCENTAGE- For purposes of this paragraph, the energy efficiency percentage of a system is the fraction--
`(I) the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and
`(II) the denominator of which is the lower heating value of the fuel sources for the system.
`(ii) DETERMINATIONS MADE ON BTU BASIS- The energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis.
`(iii) INPUT AND OUTPUT PROPERTY NOT INCLUDED- The term `combined heat and power system property' does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.
`(D) SYSTEMS USING BIOMASS- If a system is designed to use biomass (within the meaning of paragraphs (2) and (3) of section 45(c) without regard to the last sentence of paragraph (3)(A)) for at least 90 percent of the energy source--
`(i) subparagraph (A)(iii) shall not apply, but
`(ii) the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such system bears to 60 percent.'.
(3) CONFORMING AMENDMENT- Section 48(a)(1) is amended by striking `paragraphs (1)(B) and (2)(B)' and inserting `paragraphs (1)(B), (2)(B), and (3)(B)'.
(d) Increase of Credit Limitation for Fuel Cell Property- Subparagraph (B) of section 48(c)(1) is amended by striking `$500' and inserting `$1,500'.
(e) Public Utility Property Taken Into Account-
(1) IN GENERAL- Paragraph (3) of section 48(a) is amended by striking the second sentence thereof.
(2) CONFORMING AMENDMENTS-
(A) Paragraph (1) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).
(B) Paragraph (2) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).
(f) Effective Date-
(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act.
(2) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX- The amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits.
(3) COMBINED HEAT AND POWER AND FUEL CELL PROPERTY- The amendments made by subsections (c) and (d) shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
(4) PUBLIC UTILITY PROPERTY- The amendments made by subsection (e) shall apply to periods after February 13, 2008, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

Thanks, Mike.
Contact Gil or Peter about obtaining tax credits to shelter your personal or corporate income. Buy a home site at StarCross Village and watch the value climb. Is there anything easier than profiting from home ownership in a neighborhood planned to replace oil & gas guzzling homes to help our economy recover? Lenoir and Caldwell County residents: We’ll find a way to help you steal this property … and to start a trend. Hold your laughter until you have run a mile in your CPA’s shoes.