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Old 12-11-2015, 09:16   #1
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Has anyone taken the residential tax credit for solar on their boat?

It was brought to my attention that there is a 30% tax credit (not deduction!) for expenditures to install solar heating or photo-voltaic systems in a US taxpayers residence or secondary residence in the US. See this US Department of Energy write up. At least two solar vendors that I know of are promoting this as a way to afford solar for your boat.

We are full time live-aboards with our boat currently moored in the US and are about to make a sizable investment in solar on the boat. We have a head and a galley, so AFAIK, that qualifies as a residence in the eyes of the IRS.

My specific questions for folks who have done that and been there are:

Has anyone successfully taken this tax credit?

Did you claim the cost of the support structure for the panels? (I am installing an arch specifically for the solar panels.)

Did you claim batteries? (We're putting a new bank along with the panels.)

Having Uncle Sam pick up about 1/3 of the cost of my solar installation would be great, but I don't want a nasty-gram from the IRS a year down the road.
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Old 12-11-2015, 09:24   #2
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Re: Has anyone taken the residential tax credit for solar on their boat?

I took it a few years ago, but only for the solar panels, mounting hardware and charger, not for the batteries. As long as the boat is your primary residence you should be good. Of course I have a homestead exemption for my property taxes too.
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Old 12-11-2015, 09:57   #3
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Re: Has anyone taken the residential tax credit for solar on their boat?

Thanks Sailorchick, that's just the feedback that I was looking for.
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Old 12-11-2015, 10:26   #4
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Re: Has anyone taken the residential tax credit for solar on their boat?

Ditto when I replaced a couple panels several years ago. But not the structure, which was reused. I plan to take the credit again this year for two more replaced panels. I did not include the fasteners and replaced wiring because that's a minor expense and I couldn't show proof of purchase. If I was more anal I could have.....

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Old 12-11-2015, 12:13   #5
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Re: Has anyone taken the residential tax credit for solar on their boat?

I have not check the regulations on this in a few years but I thought you could take the credit for batteries.

Also check to see if you state has any tax credits for solar or WIND that would apply to the boat.

Later,
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Old 12-11-2015, 15:44   #6
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Re: Has anyone taken the residential tax credit for solar on their boat?

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Originally Posted by 2Hulls View Post
Ditto when I replaced a couple panels several years ago. But not the structure, which was reused. I plan to take the credit again this year for two more replaced panels. I did not include the fasteners and replaced wiring because that's a minor expense and I couldn't show proof of purchase. If I was more anal I could have.....



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Me too.


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Old 12-11-2015, 16:30   #7
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Re: Has anyone taken the residential tax credit for solar on their boat?

I haven't done it yet, but I plan on the Batteries too and the inverter, they are all part of the Solar system.
I believe the credit is predicated on a land dwelling, and very few things in a house use 12VDC, so I think the inverter is part of the "system". I guess I'll see what my Tax guy says.


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Old 12-11-2015, 17:10   #8
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Re: Has anyone taken the residential tax credit for solar on their boat?

We claimed the solar panels, the wind generator and all supporting items except the batteries.
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Old 12-11-2015, 17:46   #9
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Re: Has anyone taken the residential tax credit for solar on their boat?

if the tax credit applies to the system, I would absolutely claim the batteries also. if it only applies to the purchase of the panels, then NO...

the boat does need one battery to operate if it has an engine, but if it does not have an engine, it doesnt need a battery until there is power placed aboard.... and a solar array is useless without a battery bank, along with the rest of the components that make it work.

if your boat has an engine, you need to maintain the starting battery for the engine at your expense, but if you are building a nice system and spending enough money to make it worthwhile to take the credit, hence "raise a red flag", then add to it a nice bank of batteries as it IS part of the complete system.
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Old 12-11-2015, 17:53   #10
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Re: Has anyone taken the residential tax credit for solar on their boat?

My belief is if you get audited, they're going to want a parcel number from the local tax collector. I doubt it would ever come up but it really does seem clear its for property only.


So you might as well claim the arch, batteries, haulout costs whatever as you'll owe it all back anyway, but maybe they'll let you slide on a penalty due to misunderstanding onnthe second home thing. a higher cost might actually seem more normal as a big grid tie system runs into what 15K?
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Old 12-11-2015, 18:17   #11
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Re: Has anyone taken the residential tax credit for solar on their boat?

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Originally Posted by Boatguy30 View Post
My belief is if you get audited, they're going to want a parcel number from the local tax collector. I doubt it would ever come up but it really does seem clear its for property only.


So you might as well claim the arch, batteries, haulout costs whatever as you'll owe it all back anyway, but maybe they'll let you slide on a penalty due to misunderstanding onnthe second home thing. a higher cost might actually seem more normal as a big grid tie system runs into what 15K?
The IRS instructions for Form 5695, list houseboat as being OK to claim the credit. It can be your primary home or a vacation home, at least that is how it reads to me.

https://www.irs.gov/pub/irs-pdf/i5695.pdf
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Old 12-11-2015, 18:19   #12
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Re: Has anyone taken the residential tax credit for solar on their boat?

Well, this case has been to the IRS before, might want to read the article here:

IRS Confirms that Batteries Qualify for the Energy Tax Credit But Imposes Limitations - Renewable Energy World

There are limitations on the battery costs if they can/are also charged from a non-renewable energy source. Then they become 'dual-use' property. To qualify, a minimum of 75% of the energy in and out of the batteries has to come from the ITC qualified renewables. Less than 75%, batteries don't qualify - period. Between 75% and 100% the value that can be claimed for the credit is pro-rated on the amount of non-renewable energy vs. qualified renewable that is passed through the batteries.

And it gets more complicated. If you claim the credit this year, but then next year you use your motor/shorepower more you have to declare the extra usage on your return and pay back the credit you 'shouldn't' have taken. If you're renewable/non-renewable percentage drops below the 75% cliff threshold then you are liable to return any credit you claimed on the batteries.

Ain't bureaucracy grand?
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Old 12-11-2015, 18:27   #13
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Re: Has anyone taken the residential tax credit for solar on their boat?

On the, is it a home and does it qualify front?:

26 USC Section 25D. It says:

(2) Qualified solar electric property expenditure

Quote:
The term “qualified solar electric property expenditure” means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer.
And the IRS definition of "dwelling unit":

Quote:
A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. It also includes all structures or other property belonging to the dwelling unit. A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities.
Note one thing about this, the "dwelling unit" has to be in the United States, if you take your dwelling unit outside the United States during the five year recapture period then you are likely liable for re-payment of the credit, but I'm not aware of any case on that point.
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Old 12-11-2015, 19:37   #14
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Re: Has anyone taken the residential tax credit for solar on their boat?

I took it this year on my boat as well, which I lived on as a primary residence. Let's hope it sticks!


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Old 13-11-2015, 09:44   #15
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Re: Has anyone taken the residential tax credit for solar on their boat?

Quote:
Originally Posted by Grateful View Post
It was brought to my attention that there is a 30% tax credit (not deduction!) for expenditures to install solar heating or photo-voltaic systems in a US taxpayers residence or secondary residence in the US. See this US Department of Energy write up. At least two solar vendors that I know of are promoting this as a way to afford solar for your boat.

We are full time live-aboards with our boat currently moored in the US and are about to make a sizable investment in solar on the boat. We have a head and a galley, so AFAIK, that qualifies as a residence in the eyes of the IRS.

My specific questions for folks who have done that and been there are:

Has anyone successfully taken this tax credit?

Did you claim the cost of the support structure for the panels? (I am installing an arch specifically for the solar panels.)

Did you claim batteries? (We're putting a new bank along with the panels.)

Having Uncle Sam pick up about 1/3 of the cost of my solar installation would be great, but I don't want a nasty-gram from the IRS a year down the road.
Your boat has to be accepted by the IRS as your primary or second home for tax purposes. Residential Renewable Energy Tax Credit | Department of Energy

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. As long as the boat has sleeping, cooking and toilet facilities, the boat counts as a home, according to IRS Publication 936. So, if you are in US waters, you may be okay. I'd check with a CPA to be sure.

Good luck, and wishing you sunny days!


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