Solar energy credit for rental home

Forum|Forum|11 months ago
April 5, 2025
2 replies
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I bought a residential property last year and rented it out. This was a new construction and I had to pay for the solar system as it was required by the City. Can I claim the cost I paid in my returns?

Thanks.

PatriciaV

The cost of the solar system may be reported as an improvement asset under your Rental Property.

For instructions on entering this asset, see How do I handle capital improvements and depreciation for my rental?

[edited 4/14/25 | 1:28 PDT]

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Opus 17

The section 25D credit on form 5695 that applies to homeowners is not allowed for business property. Specifically, if the home is used less than 80% for personal use, you can only claim the percentage of the credit that applies to personal use (which would be zero for a full time rental).

I believe there is a separate credit under section 48 that is allowed for business property, but I don't know anything about how to claim that credit.