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Old 07-28-2017, 06:40 PM
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Solar Credit in Rental

I am in a rental house that my mother-in-law owns. We want to get solar but we want to make sure we get all the tax credits we can. Federal ITC is 30% and the State of Utah is $2000. Unfortunately, I am not the property owner and the M-I-L does not live in the house (that is fortunate...). A representative from the solar company we are looking at had previous experience in financial planning and was a CPA. He suggested something with sounds like it would work, but may be ethically questionable. I want to make sure it is legal and/if there are any risks we need to be aware of.

He suggested my M-I-L adds my wife to the title of the house for a short period of time while we go through the process. Then she can be removed after a period of time. This way we can have the solar in our name, get the tax credit, and we will do the financing.

The M-I-L does not have any concerns with my wife on the title. I guess she trusts us...

Any advice? Is this doable? Is it legal? Would this raise a red flag with the IRS? What should we be concerned about? How long should my wife be on the title?

Maybe there is a better way to accomplish the same results. Any other advice or suggestions?

Bryan
SLC, UT



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Old 07-28-2017, 09:42 PM
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I am in a rental house that my mother-in-law owns. We want to get solar but we want to make sure we get all the tax credits we can. Federal ITC is 30% and the State of Utah is $2000. Unfortunately, I am not the property owner and the M-I-L does not live in the house. ======>>If the property is a rental only, you cannot claim the tax credit. HOWEVER, if you own the property and maintain it as a residence for a certain portion of the year (i.e., you rent it out while you?re away), you can claim the credit for the portion of the year you spend there. For example, if you install $20k worth of solar panels on a home in utah that you live in from Nov. 1st to May 1st, and you rent that home during the summer, you are entitled to take $2k.

A representative from the solar company we are looking at had previous experience in financial planning and was a CPA. He suggested something that sounds like it would work, but my be ethically questionable. I want to make sure it is legal and/if there are any risks we need to be aware of.=====>Agreed.

He suggested my M-I-L adds my wife to the title of the house for a short period of time while we go through the process. Then she can be removed after a period of time. This way we can have the solar in our name, get the tax credit, and we will do the financing.

The M-I-L does not have any concerns with my wife on the title. I guess she trusts us...

Any advice? Is this doable? Is it legal? Would this raise a red flag with the IRS? What should we be concerned about? How long should my wife be on the title? =======>it is a sort of legal issue to talk about How to Add Someone to a Deed.In most cases the literal answer is quite simple: execute and record a deed granting an undivided ownership interest in the property to the person in question. In real life, though, things are rarely so simple. If the property is encumbered by a mortgage, the first issue to consider is whether adding you to the deed will violate the terms of mil?s loan documents. The vast majority of states mortgages contain a "due on sale clause." Essentially, a due on sale clause states that if the debtor attempts to convey any interest in the property before the loan is paid in full, the lender may declare the loan in default. If the loan documents contain a due on sale clause, the best approach is usually to ask the lender to consent to adding someone else to the deed. For everyone's protection, the consent should be in writing.i guess you need some ;;legal advice for sure



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Old 07-28-2017, 10:26 PM
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Thanks Wnhough, I guess the vital piece of information I left out was the home is paid for and there is no mortgage limitations in the way. Maybe his makes it easier...



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Old 07-29-2017, 12:59 PM
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Originally Posted by bmbirch View Post
Thanks Wnhough, I guess the vital piece of information I left out was the home is paid for and there is no mortgage limitations in the way. Maybe his makes it easier...
So, how does adding a child?s name to the title of the rental property affect CGtaxes. Usually, homeowners want to understand your issue when it comes to federal income taxes.
Just in case you were not aware of the larger issues involved when gifting a piece of property, here?s a brief summary of some of the tax issues involved. Giving a significant gift of more than $14k in 2017, which is the amount anyone can give anyone else without triggering a taxable event, affects a variety of tax issues.then MIL needs to file form 709 with the IRS. but, as long as the net figure is less than $5.49 million, milwon?t owe any current gift tax (unless she made very substantial gifts earlier that used up part of her exemption) I guess you need some professional help/advice from an Irs Enrolled agent or a CPA doing taxes in your local area for more info in detail



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