LLC partnership and Investment Tax Credit

Forum|Forum|5 years ago
March 12, 2021
1 reply
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Hello,

We have installed a solar system in 2020 at our business, which is a multi-member LLC. We understand the 26% federal solar investment tax credit is shared by the partners. But my questions are where does it go on 1065 and schedule K1 or how is the credit reported to the partners. I reviewed the K1 instructions but it is bit confusing. Do we need to use form 3468?

Thanks

Not A Product Question

JeffreyR77

The Partnership is a pass -through entity, as such it pays not tax, and has not need for a tax credit.

The Investment Tax Credit for the solar tax credit is calculated on Form 3468 and is not added to Form 1065.

The basis of the solar property included in the solar tax credit is reported on each member's K1 in box 20.

Form 3468 will need to be printed and mailed in with either the tax return or Form 8453.

Each member will claim their credit on their individual tax return.

smvee01Author

Thanks for your answer, but I found out from TaxAct instructions and IRS instructions that PTE does not have to file form 3468. TaxAct creates an investment credit worksheet that gets attached to K1 and provided to the partners.