Question

Can I deduct a portion of my investment in solar panels as an asset for a rental unit in my home?

Forum|Forum|1 year ago
March 14, 2025
1 reply
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In early 2024, I invested in solar panels for my home, and I am claiming that investment as a clean energy tax credit for 2024. However, I have a basement apartment in my home that comprises roughly 30% of the home's square footage. Can I also claim the roughly 30% of the cost of the solar panels as a capital improvement for the basement apartment? If so, exactly where do I do so in Turbotax.

A

AmeliesUncle

The "Residential Clean Energy Tax Credit" for solar has rules if it is used less than 80% for personal purposes.

I suspect you need to claim 70% of the cost as the Residential Clean Energy Tax Credit on Form 5695. Then claim the other 30% on Form 3468 for the rental portion.

Yes, you can depreciate it for the rental. You would depreciate 30% of the cost, MINUS 1/2 of the business credit on Form 3468. In the rental section, you would enter an "asset" for depreciation, and it would usually be depreciated over 5 years.

O

Opus 17

No "suspect" about it. The homeowner claims 70% of the cost for the personal tax credit. The other 30% is a business expense. The asset is added to the property and depreciated, and there is a separate (different) business solar energy credit that can be claimed for the 30% rental portion.