What is a Characteristic Property?

Tax Questions: what is "QUALIFIED SOLAR ELECTRIC PROPERTY" ?

• hi all, I want to know what it mean by "QUALIFIED SOLAR ELECTRIC PROPERTY" from Form 5695, it said "Qualified solar electric property costs. Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in a home located in the United States and used as your home. This includes costs relating to a solar panel or other property installed as a roof or a portion of a roof. The home does not have to be your main home." what I am not sure is by "installed as a roof or a portion of a roof" If I buy a solar panel and installed in on top of my roof, would that be consider "installed a portion of a roof" also http://www.theorator.com/bills109/s3628.html "`(2) QUALIFIED SOLAR ELECTRIC PROPERTY- The term `qualified solar electric property' means solar electric property (as defined in section 179F(c)(2)(B)) installed on or in connection with a dwelling unit located in the US" what is "179F(c)(2)(B)",where can I find more on it?

• Answer:

  If you look in the link you posted, and scroll down, IRC Title 26, Section 179F(c)(2)(B): ~~~(B) SOLAR ELECTRIC PROPERTY- The term `solar electric property' means property which uses solar energy to generate electricity.~~~ Qualified solar electric property includes a solar panel installed on the roof, but it also includes other equipment not installed on the roof, also any wiring, piping, etc. associated with installation. It must be properly installed with all necessary permits, and according to local fire and building codes. Solar electric property is "qualified" if it is for use in a home located in the US that you own and live in at least part of the year. Form 5695 is filed to claim the Non Business Energy Credit. In 2006, you were allowed a credit of 30% of your solar electric property costs, up to $2000 for qualified solar electric property, and up to $2000 for costs related to solar electric water heating, and a credit towards a fuel cell if you have one. If the solar panel is permanently installed on your roof, it becomes a fixture, and part of your basis for the house. You must reduce the basis of your house by the amount of the credit claimed. When you sell your property, since your basis is higher, any taxable gain will be less. See page 3 & 4, IRS Pub 553 for more information: http://www.irs.gov/pub/irs-pdf/p553.pdf If your home is used for business, or you have a home office, then you are allowed to deduct depreciation on that percentage of business use. The solar panels and equipment increase the basis of your home and can be included in your depreciation calculations. There are also other credits and deductions related to using solar electricity in business property. Legislation is in place to extend energy efficient credits to renters, and others who don't own the property where they live. You should also check your state income tax code for solar energy credits and deductions allowed on your state return.