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Energy Credits for Sale? New Proposed Regs on Buying and Selling Energy Tax Credits

December 19, 2023 (3 min read)

The Treasury Department recently proposed regulations providing guidance on the ability of taxpayers to transfer by sale certain federal income tax credits derived from investments in renewable energy projects. This article provides an overview of the fundamental requirements and procedures for selling federal renewable energy tax credits, as set forth in I.R.C. § 6418.

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DID YOU KNOW? Contractors who build or substantially reconstruct qualified energy-efficient homes may be eligible for tax credits up to $5,000 per home. The amount of the credit depends on factors including the type of home, its energy efficiency rating, and the date when someone buys or rents it.

Practical Guidance Updates 
Featuring the latest updates from your Practical Guidance account.    

  •  Tax Key Legal Developments Tracker (Federal)—keep up to date with key legal developments!
    • Business Entities. IRS and Treasury Department proposed regulations that would update regulations regarding whether persons are treated as related persons who are subject to certain special rules pertaining to transactions with partnerships. The regulations affect partnerships that enter into transactions with related persons that result in gain or loss on a sale or exchange of property or a difference in the timing of income and deduction recognition due to the entities different methods of accounting. 88 Fed. Reg. 82792 (Nov. 27, 2023) (Transactions Between Related Persons and Partnerships).
    • Business Entities. IRS and Treasury Department proposed regulations regarding excise taxes on taxable distributions made by a sponsoring organization from a donor advised fund, and on the agreement of certain fund managers to the making of such distributions. 88 Fed. Reg. 77922 (Nov. 14, 2023) (Taxes on Taxable Distributions from Donor Advised Funds under Section 4966).


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