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As a little background, Client files 2020 tax return and claims 26% Solar Energy Tax credit on 60,000 of qualified solar property installed on Main residence. Per the IRS - the SREC payments/incentives are considered reportable income. I'd say report as "Other Income".
As a result of the solar installation - client receives solicitation from let's call them "Green" TaxExperts" and they claim that client should file Form 3468, 4562, and Schedule C to claim Depreciation, Interest, Utilities, etc. because his solar equipment is generating income and therefore he is entitled to the corresponding tax deductions. The client is retired and is NOT Self Employed. In order to file Schedule C, an individual has to be "engaged an activity for profit" - this alone precludes the filing of Schedule C when the only motive of the "green tax experts" is to generate huge deductions. The whole scheme seems not just aggressive but step on the gas aggressive. Anyone had this come up or thoughts?
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From last year https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/solar-panels-basis-for-...
Is this somehow related to Solar Tax Association?? A client recently present an opinion from a "CPA" that he paid $750 for supporting this stand. If it is that business is currently a suspended LLC in California.
I also found this https://www.facebook.com/BBBPacificSW/posts/i-want-to-write-a-watch-out-for-going-green-tax-experts-...
It it walks like a duck and squawks like a duck, sometimes it is a pig. It depends on how much you paid to watch the performance. If it was free, it probably really was a duck.
Answers are easy. Questions are hard!
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Thanks for the information - seems like similar situation as the BBB Pacific facebook post (i.e. "green tax expert" charges $590.00 up front an they'll give the completed Form 3468, Schedule C, and Form 4562 to you). All fine and dandy except the problem is that there is no legitimate business activity involved.
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"charges $590.00 up front"
And do you really think it is only coincidental that this falls under the1099 reporting threshold? Hmmm...
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DON'T DO IT if you have any hesitancy at all.
Answers are easy. Questions are hard!
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No way....I would never sign off on a scenario like this.