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Posted by rlsusenet@NOSPAMPUHLEEZschnapp on September 23, 2007, 7:45 pm
Please log in for more thread options Seth wrote:
>> Around 3 AM, it occurred to me that I don't know the answer
>> to this question, and I'll need to know it eventually:
>>
>> We put a solar electric (PV) system on our home in 2001.
>> Say it cost around $33k. This is in California, and the CA
>> Energy Commission reimbursed us around $14k. And then we
>> got another $3k CA income tax credit.
>>
>> So my question is this: By how much did our cost basis go up?
>> $16k? (both CEC rebate and tax credit count)
>> $19k? (tax credit doesn't count)
>> $30k? (CEC rebate doesn't count)
>> $33k? (neither rebate nor credit count)
>>
>> I've been assuming that the number is $16k, since that's what I'm
>> out-of-pocket. Any other opinions?
> What were the federal tax implications?
>
> If the CEC rebate isn't taxable, then it reduces the
> increase in basis.
>
> The CA income tax credit _is_ federally taxable, so I don't
> know; it should reduce the CA basis, but not the federal
> basis (or perhaps reduce the federal basis by its after-tax
> value).
Ah, THAT makes sense: If a rebate/credit was taxed, then
it's inappropriate to use it to decrease the basis.
Since the CA tax credit was federally taxed, then perhaps
the federal basis for the house is higher (by the amount of
the credit) than the CA basis.
Thanks for the insight!
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