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.