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

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.

Read now »

Related Content

• Energy Tax Credit Transfer Election Statement (I.R.C. § 6418)
  Learn more about the transfer election statement that must be attached to each party’s respective income tax return to the transaction. I.R.C. § 6418 allows for the purchase and sale of certain clean energy-related federal tax credits between unrelated parties. 

• Energy Tax Credits and Incentives
  See how energy tax credits that apply to businesses are categorized with general business credits that are reported by individuals, corporations, estates, and trusts on Form 3800.

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).

• Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts. 
• Generative Artificial Intelligence (AI) Resource Kit is a frequently updated collection of current Practical Guidance materials on generative AI, ChatGPT, and similar tools.
• Public Interest, Pro Bono, and Non-Profit Resource Kit offers valuable guidance for those providing pro bono legal services and assisting non-profit organizations and public interest groups. It includes useful content on topics including tenant's rights, fair housing and lending, discrimination, immigration, and general non-profit resources. 
• Check out our Practical Guidance Author Center! Learn about the 2000+ leading attorney authors contributing to our 26 practice areas, and find out how you can Become a Practical Guidance Author. Practical Guidance is committed to amplifying diverse voices of attorneys across all differences, including gender and race.  
• Legal Developments provide the latest updates and analyses of emerging topics impacting your practice area. Visit the Legal Developments page to see the latest topics, which also include breaking legal news and related Practical Guidance content. 
• Listen Up! The Practical Guidance and Law360 Podcasts Resource Kit features interviews with industry-leading attorneys on innovative issues in the law: NFTs, Cannabis, COVID-19, and more.
• New and Recently Updated Practical Guidance Content
  • Interest Rates on State Income Tax Underpayments and Overpayments State Law Survey
  • US Scrambling to Save R&D Credit under Global Min. Tax
  • Further Delay of Implementation of $600 Reporting Threshold for Forms 1099-K; $5000 Threshold for 2024 to Phase in Implementation
  • IRS Floats Rules to Broaden Green Energy Investment Credit
  • IRS Announces New Compliance Initiatives Aimed at Large Corporations
  • Notice 2023-65: Guidance on New Energy Efficient Home Credit under Section 45L

PRACTICAL GUIDANCE CUSTOMER EMAIL EDITION ON THE WEB

Experience results today with practical guidance, legal research, and data-driven insights—all in one place.

Experience Lexis+