SolarCapitalGroup: Peril In 1603 Grants and Tax Credits?

I was talking to a solar investor this morning who knew of an individual that decided to invest in several solar tax credit partnerships.

Rather than take the timeline risk of waiting on 1603 Grants to be paid, which has become a bit of a mysterious endeavor, he chose to invest in partnerships which would offer “pass through” benefits of the solar Investment Tax Credit (ITC). This was back in 2010. Now, in 2013, the IRS has decided to review those Partnerships. Guess what? The IRS doesn’t agree with the Cost Basis created by the developers of the original Partnership. IRS has hit up this investor with demands for interest, fees, and of course, a huge amount of additional tax.

When investing in a Tax Equity Partnership, be sure the Developers are using market comparables, which come in conservatively, rather than aggressively. Otherwise---this picture above, could be you.

Jim Young

President

Solar Capital Group, LLC

512-565-7509

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