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Renewable Energy Tax Credit News Briefs – August 2018

The Internal Revenue Service (IRS) June 25 released Notice 2018-59, establishing beginning-of-construction guidance for the renewable energy investment tax credit (ITC) under Section 48 of the Internal Revenue Code. The notice provides two methods for taxpayers to establish the beginning of construction: a physical work test and a 5 percent safe harbor. The guidance also provides a continuity requirement for both methods, rules for transferring energy property and additional rules applicable to the beginning-of-construction requirement of Section 48. The notice is available at www.energytaxcredits.com. 

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Two U.S. senators asked the Treasury Department to prioritize guidance June 7 on construction start dates for solar energy property eligible for the ITC. Sens. Maria Cantwell, D-Wash., and Dean Heller, R-Nev., sent a letter asking Treasury to clarify what constitutes “begun construction” for property receiving the ITC. The 2016 Consolidated Appropriations Act added a start-of-construction factor to eligibility criteria for properties built during the ITC’s phasedown from 30 percent to 10 percent. The letter is available at www.energytaxcredits.com.

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David Brown, chief executive officer of Obsidian Renewables, and Allen Alley, managing member of The Alley Group LLC, announced late June the launch of an opportunity zone fund. The Obsidian Opportunity Funds could support a range of investments, with a focus on solar power developments. There would be no capital gains tax on the opportunity fund investment if held for 10 years. 

Journal Category:

Renewable Energy Tax Credits

Authors:

Novogradac

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