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    My client had a solar energy system installed on a rental property. What type of asset is the solar energy system?

    nz
    Level 1
    For depreciation purposes, what type of asset is a solar energy system installed on a rental property?
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    4 Comments 4
    dkh
    Level 15

    There's only two options   Type of Asset - F  rental furnishings    or  I - Rental Real Estate       well maybe three because you could choose   O - other 

    So if the neighbor came over and said "hey I really like your solar system can I buy it?"    could it be removed and sold without tearing into the property?   If no - then it is part of the real estate.   Doesn't a solar system require lots of "plumbing" installation.

    Terry53029
    Level 15
    Level 15

    Qualifying solar energy equipment is eligible for a cost recovery period of five years. See link:

    https://www.seia.org/initiatives/depreciation-solar-energy-property-macrs

    nz
    Level 1

    They are solar panels so no plumbing installation.

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    dkh
    Level 15

    What I meant by "plumbing"  is the connection from solar panels to what is being powered by them.