Business solar purchase depreciation basis - Spidell

Business solar purchase depreciation basis

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Message Board Business solar purchase depreciation basis

  • This topic has 1 reply, 2 voices, and was last updated 1 week, 3 days ago by William Dewberry.
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    • #198085
      Leon King
      Participant

      I have a client with a hotel who wants to purchase solar panels for this business. The entity is a CA LLC. I understand that if it is placed in service by December 31 there will be a 30% federal tax credit pass-through. I also understand that under federal rules the depreciable basis is the cost less 50% of the solar credit – or in other words the client gets to depreciate 85% of the cost. (Wondering why I didn’t do this.)

      However, for California, unless they follow the federal rules, I would assume that the depreciable basis would be 70% of the cost.

      I can not find any authority on this and would appreciate some help.

      Thank you,

      Leon King, CPA

       

    • #198106
      William Dewberry
      Participant

      Ca basis is not reduced by federal credit – 100% of cost.

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