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Solar Panels Basis for Treatment

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Level 2

My client purchased solar panels.  The solar panel company informed them that they could treat the purchase of the solar equipment as income-producing property and report depreciation and related expenses on a Schedule C.  The basis for this treatment rests with the fact that the taxpayer entered into a formal agreement with the utility company to sell the power generated by that solar equipment back to the utility.  These are referred to a Net Metering Agreements and they specify the rate and terms of the reimbursement of power generation.  Produced power flows back to the grid and is sold to the utility company.  The utility company reimburses the power production in the form of a financial credit to the customer account.  As such, the sale of that power can potentially be considered a taxable event.

Has anyone heard of this?  Or better have any experience preparing a Schedule C for this.  I'm skeptical. 

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Level 15

I have also heard of this. 

I am also extremely skeptical. I believe it is a scam to get people to buy solar panels. The client would have to prove a profit motive for their schedule C. Who are the clients business clients? 

I did a google search and found Capture.JPG

with this link https://pcisolar.com/resources/save-money-with-the-federal-solar-tax-credit/ The result should tell you something  Did they sell your client the system?


ex-AllStar

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Highlighted
Level 15

I have also heard of this. 

I am also extremely skeptical. I believe it is a scam to get people to buy solar panels. The client would have to prove a profit motive for their schedule C. Who are the clients business clients? 

I did a google search and found Capture.JPG

with this link https://pcisolar.com/resources/save-money-with-the-federal-solar-tax-credit/ The result should tell you something  Did they sell your client the system?


ex-AllStar

View solution in original post