solar interest

[MGC94]

Can I deduct solar interest payments. it was not a home equity.

[jeffmcpa2010]

Double check the loan paperwork, all the banks in my area loaning on solar are filing a lien (mortgage) on the property.

[qbteachmt]

A lien on the property is not Debt; it's secured against financial removal of real property when that owner owes someone for something that can be attached to real property. I have put liens on property more often than I'd like, for purposes of unpaid Water bills, unpaid Architectural design; even a property Tax can be liened. At most, it is like HELOC or credit card interest.

[jeffmcpa2010]

@qbteachmt I was making a point, that a Debt secured by a lean on the real property for an improvement to a primary residence, "MAY" be interpreted (by some) to allow the interest to be deducted as Home Mortgage Interest. Where an unsecured debt would ( in my opinion) be clearly not deductible. 

[qbteachmt]

As I pointed out, it is "like" HELOC or Credit Card, as the person asking also stated it is not from Home equity. I was pointing out that the presence of a Lien doesn't have to relate to anything that counts as deductible or even as debt. A lien is a process. It's a way to flag the property, such as a Lawyer wants to place a lien on my house against a contingency lawsuit. In that example, there is no debt, no loan, and no interest. It's a fallback provision. It's like a co-signer, not the borrower.

It is typical for the financing to be part of the retail package offered by the installers who are also offering ridiculous statements regarding rebates and tax "refunds" to the customers. This would be Solar Interest. It's the same as if you put it on a credit card, because it is Vendor Cardless Lending, really. It's like buying a roof and agreeing to pay over time.

If it is a HELOC, that follows the tracing rules, that the funds were used for improvement to the house leveraged. The solar cost falls under the energy credit provision. The Interest, in this example, falls under the Mortgage provision. It's not Solar Interest, in this example.