MACRS depreciation + tax credit on a residential system w/ home office?

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HX_Guy
HX_Guy Solar Expert Posts: 296 ✭✭✭✭✭✭
in Solar Beginners Corner #1
Coming out of the gate here with a lot of questions. :) I was advised on another forum to look into MACRS depreciation on a solar system because we have our own business which we run from home. I've looked a little online but haven't found much info and not sure if our accountant knows much about it (they haven't gotten back to me yet).

Anyone have info on this? Could there be a potential tax benefit under the Modified Accelerated Cost Recovery System? Additionally, I know there is a 30% federal tax credit on residential systems but there is also a 30% for businesses. Do both of those need to be claimed or how does that work?
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  • BB.
    BB. Super Moderators, Administrators Posts: 33,439 admin
    #2
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    Re: MACRS depreciation + tax credit on a residential system w/ home office?

    Another thing to check for is the Utility billing plan you will fall under with a business... In California, the tariffs are completely different and solar power is not a "no-brainer" on saving money.

    Make sure that somebody reputable is looking at what happens with your utility bill--Again, in California, it is a mess trying to figure out what will happen with commercial tariffs..

    And, in some cases, can end up increasing commercial bills (due to reservation/demand charges which apply for consumed or generated power--At least in California).

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
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  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #3
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    Re: MACRS depreciation + tax credit on a residential system w/ home office?

    I am certainly no tax expert but,

    And if you sell don't you have to calculate back the value of the solar system (conversion of a business asset to personal usage) and take that as income and pay tax then on it?

    Personally I worked out of a home office for years as a 1099 contractor, my business portion of the property was a 100 sq ft office with a 3100 sq ft property. The percentage I could take was so small and it clouded the property with the IRS so much that I deemed the savings on taxes not worth the effort or the risk of having those guys looking up my #*(&%. For me the risk was way higher than the reward. I claimed my operating expenses like phone and internet but my electric bill was so small I never bothered with it.
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