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Tax implications of solar
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Stan Brown
Apr 5, 2021, 2:52:35 PM4/5/21
to
I live in California, and the solar panels on the roof generate
considerably more electricity than I use. Consequently, I'll be
getting a check from SoCal Edison (in the low four figures) for the
electricity that I put back on the grid over the past year.
The way my solar lease works, I have to pay Tesla for every kWh I
generate, whether I use it myself or it goes out on the grid. Thus I
will net only a few hundred dollars for the year.
Are there any income-tax implications here, either at the Federal or
state level? I'm not in the business of generating electricity, so I
would hope that the proceeds from SoCal Edison aren't taxed. But if
they are, is this a Schedule C type business? And in that case, I
assume I can deduct what I pay Tesla as cost of goods sold.
--
Stan Brown, Tehachapi, California, USA https://BrownMath.com/
https://OakRoadSystems.com/
Shikata ga nai...
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
considerably more electricity than I use. Consequently, I'll be
getting a check from SoCal Edison (in the low four figures) for the
electricity that I put back on the grid over the past year.
The way my solar lease works, I have to pay Tesla for every kWh I
generate, whether I use it myself or it goes out on the grid. Thus I
will net only a few hundred dollars for the year.
Are there any income-tax implications here, either at the Federal or
state level? I'm not in the business of generating electricity, so I
would hope that the proceeds from SoCal Edison aren't taxed. But if
they are, is this a Schedule C type business? And in that case, I
assume I can deduct what I pay Tesla as cost of goods sold.
--
Stan Brown, Tehachapi, California, USA https://BrownMath.com/
https://OakRoadSystems.com/
Shikata ga nai...
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Alan
Apr 13, 2021, 1:19:43 PM4/13/21
to
On 4/5/21 11:51 AM, Stan Brown wrote:
> I live in California, and the solar panels on the roof generate
> considerably more electricity than I use. Consequently, I'll be
> getting a check from SoCal Edison (in the low four figures) for the
> electricity that I put back on the grid over the past year.
>
> The way my solar lease works, I have to pay Tesla for every kWh I
> generate, whether I use it myself or it goes out on the grid. Thus I
> will net only a few hundred dollars for the year.
>
> Are there any income-tax implications here, either at the Federal or
> state level? I'm not in the business of generating electricity, so I
> would hope that the proceeds from SoCal Edison aren't taxed. But if
> they are, is this a Schedule C type business? And in that case, I
> assume I can deduct what I pay Tesla as cost of goods sold.
>
As far as I can tell, there has not been any change to the tax rules
> I live in California, and the solar panels on the roof generate
> considerably more electricity than I use. Consequently, I'll be
> getting a check from SoCal Edison (in the low four figures) for the
> electricity that I put back on the grid over the past year.
>
> The way my solar lease works, I have to pay Tesla for every kWh I
> generate, whether I use it myself or it goes out on the grid. Thus I
> will net only a few hundred dollars for the year.
>
> Are there any income-tax implications here, either at the Federal or
> state level? I'm not in the business of generating electricity, so I
> would hope that the proceeds from SoCal Edison aren't taxed. But if
> they are, is this a Schedule C type business? And in that case, I
> assume I can deduct what I pay Tesla as cost of goods sold.
>
(federal and CA). You are not a business so NO Schedule C. The amount
you netted is taxable Other Income (1040 Schedule 1 Line 8).
ira smilovitz
Apr 13, 2021, 3:39:52 PM4/13/21
to
ira smilovitz
Apr 13, 2021, 3:54:54 PM4/13/21
to
On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
> On 4/5/21 11:51 AM, Stan Brown wrote:
> > I live in California, and the solar panels on the roof generate
> > considerably more electricity than I use. Consequently, I'll be
> > getting a check from SoCal Edison (in the low four figures) for the
> > electricity that I put back on the grid over the past year.
> >
> > The way my solar lease works, I have to pay Tesla for every kWh I
> > generate, whether I use it myself or it goes out on the grid. Thus I
> > will net only a few hundred dollars for the year.
> >
> > Are there any income-tax implications here, either at the Federal or
> > state level? I'm not in the business of generating electricity, so I
> > would hope that the proceeds from SoCal Edison aren't taxed. But if
> > they are, is this a Schedule C type business? And in that case, I
> > assume I can deduct what I pay Tesla as cost of goods sold.
> >
> As far as I can tell, there has not been any change to the tax rules
> (federal and CA). You are not a business so NO Schedule C. The amount
> you netted is taxable Other Income (1040 Schedule 1 Line 8).
> --
I'm not sure I agree. The production of excess electricity is an ongoing activity. By selling the excess electricity for more than the cost to produce it, you have established that there is a profit motive. It doesn't need to be your primary (or even significant) source of income to be a business.
> > I live in California, and the solar panels on the roof generate
> > considerably more electricity than I use. Consequently, I'll be
> > getting a check from SoCal Edison (in the low four figures) for the
> > electricity that I put back on the grid over the past year.
> >
> > The way my solar lease works, I have to pay Tesla for every kWh I
> > generate, whether I use it myself or it goes out on the grid. Thus I
> > will net only a few hundred dollars for the year.
> >
> > Are there any income-tax implications here, either at the Federal or
> > state level? I'm not in the business of generating electricity, so I
> > would hope that the proceeds from SoCal Edison aren't taxed. But if
> > they are, is this a Schedule C type business? And in that case, I
> > assume I can deduct what I pay Tesla as cost of goods sold.
> >
> As far as I can tell, there has not been any change to the tax rules
> (federal and CA). You are not a business so NO Schedule C. The amount
> you netted is taxable Other Income (1040 Schedule 1 Line 8).
> --
Ira Smilovitz, EA
Leonia, NJ
Taxed and Spent
Apr 13, 2021, 6:35:03 PM4/13/21
to
On 4/13/2021 12:50 PM, ira smilovitz wrote:
> On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
>> On 4/5/21 11:51 AM, Stan Brown wrote:
>>> I live in California, and the solar panels on the roof generate
>>> considerably more electricity than I use. Consequently, I'll be
>>> getting a check from SoCal Edison (in the low four figures) for the
>>> electricity that I put back on the grid over the past year.
>>>
>>> The way my solar lease works, I have to pay Tesla for every kWh I
>>> generate, whether I use it myself or it goes out on the grid. Thus I
>>> will net only a few hundred dollars for the year.
>>>
>>> Are there any income-tax implications here, either at the Federal or
>>> state level? I'm not in the business of generating electricity, so I
>>> would hope that the proceeds from SoCal Edison aren't taxed. But if
>>> they are, is this a Schedule C type business? And in that case, I
>>> assume I can deduct what I pay Tesla as cost of goods sold.
>>>
>> As far as I can tell, there has not been any change to the tax rules
>> (federal and CA). You are not a business so NO Schedule C. The amount
>> you netted is taxable Other Income (1040 Schedule 1 Line 8).
>> --
>
> I'm not sure I agree. The production of excess electricity is an ongoing activity. By selling the excess electricity for more than the cost to produce it, you have established that there is a profit motive. It doesn't need to be your primary (or even significant) source of income to be a business.
>
> Ira Smilovitz, EA
> Leonia, NJ
>
Schedule E?
> On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
>> On 4/5/21 11:51 AM, Stan Brown wrote:
>>> I live in California, and the solar panels on the roof generate
>>> considerably more electricity than I use. Consequently, I'll be
>>> getting a check from SoCal Edison (in the low four figures) for the
>>> electricity that I put back on the grid over the past year.
>>>
>>> The way my solar lease works, I have to pay Tesla for every kWh I
>>> generate, whether I use it myself or it goes out on the grid. Thus I
>>> will net only a few hundred dollars for the year.
>>>
>>> Are there any income-tax implications here, either at the Federal or
>>> state level? I'm not in the business of generating electricity, so I
>>> would hope that the proceeds from SoCal Edison aren't taxed. But if
>>> they are, is this a Schedule C type business? And in that case, I
>>> assume I can deduct what I pay Tesla as cost of goods sold.
>>>
>> As far as I can tell, there has not been any change to the tax rules
>> (federal and CA). You are not a business so NO Schedule C. The amount
>> you netted is taxable Other Income (1040 Schedule 1 Line 8).
>> --
>
> I'm not sure I agree. The production of excess electricity is an ongoing activity. By selling the excess electricity for more than the cost to produce it, you have established that there is a profit motive. It doesn't need to be your primary (or even significant) source of income to be a business.
>
> Ira Smilovitz, EA
> Leonia, NJ
>
Tom Russ
Apr 13, 2021, 6:35:03 PM4/13/21
to
On Tuesday, April 13, 2021 at 12:54:54 PM UTC-7, ira.sm...@gmail.com wrote:
> On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
> > On 4/5/21 11:51 AM, Stan Brown wrote:
> > > I live in California, and the solar panels on the roof generate
> > > considerably more electricity than I use. Consequently, I'll be
> > > getting a check from SoCal Edison (in the low four figures) for the
> > > electricity that I put back on the grid over the past year.
> > >
> > > The way my solar lease works, I have to pay Tesla for every kWh I
> > > generate, whether I use it myself or it goes out on the grid. Thus I
> > > will net only a few hundred dollars for the year.
> > >
> > > Are there any income-tax implications here, either at the Federal or
> > > state level? I'm not in the business of generating electricity, so I
> > > would hope that the proceeds from SoCal Edison aren't taxed. But if
> > > they are, is this a Schedule C type business? And in that case, I
> > > assume I can deduct what I pay Tesla as cost of goods sold.
> On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
> > On 4/5/21 11:51 AM, Stan Brown wrote:
> > > I live in California, and the solar panels on the roof generate
> > > considerably more electricity than I use. Consequently, I'll be
> > > getting a check from SoCal Edison (in the low four figures) for the
> > > electricity that I put back on the grid over the past year.
> > >
> > > The way my solar lease works, I have to pay Tesla for every kWh I
> > > generate, whether I use it myself or it goes out on the grid. Thus I
> > > will net only a few hundred dollars for the year.
> > >
> > > Are there any income-tax implications here, either at the Federal or
> > > state level? I'm not in the business of generating electricity, so I
> > > would hope that the proceeds from SoCal Edison aren't taxed. But if
> > > they are, is this a Schedule C type business? And in that case, I
> > > assume I can deduct what I pay Tesla as cost of goods sold.
> > --
> I'm not sure I agree. The production of excess electricity is an ongoing activity. By selling the excess electricity for more than the cost to produce it, you have established that there is a profit motive. It doesn't need to be your primary (or even significant) source of income to be a business.
Does this mean that if one pays for an owns the solar panels (instead of the lease in this case), that depreciation of the solar installation would apply?
> I'm not sure I agree. The production of excess electricity is an ongoing activity. By selling the excess electricity for more than the cost to produce it, you have established that there is a profit motive. It doesn't need to be your primary (or even significant) source of income to be a business.
If so, this would presumably need to be pro-rated between the personal use of the electricity versus the amount sold back into the grid?
Any other issues related to depreciation and personal use?
Stuart O. Bronstein
Apr 13, 2021, 7:30:06 PM4/13/21
to
Tom Russ <tar...@google.com> wrote:
> Does this mean that if one pays for an owns the solar panels
> (instead of the lease in this case), that depreciation of the
> solar installation would apply?
>
> If so, this would presumably need to be pro-rated between the
> personal use of the electricity versus the amount sold back into
> the grid? Any other issues related to depreciation and personal
> use?
I guess you could calculate which portion of the solar panels were used
> Does this mean that if one pays for an owns the solar panels
> (instead of the lease in this case), that depreciation of the
> solar installation would apply?
>
> If so, this would presumably need to be pro-rated between the
> personal use of the electricity versus the amount sold back into
> the grid? Any other issues related to depreciation and personal
> use?
to generate electricity that got sold back, and then deduct $5 per
square foot of the panels. :-)
--
Stu
http://DownToEarthLawyer.com
ira smilovitz
Apr 13, 2021, 10:00:15 PM4/13/21
to
Ira Smilovitz, EA
Leonia, NJ
ira smilovitz
Apr 13, 2021, 10:05:16 PM4/13/21
to
On Tuesday, April 13, 2021 at 7:30:06 PM UTC-4, Stuart O. Bronstein wrote:
> Tom Russ <tar...@google.com> wrote:
>
> > Does this mean that if one pays for an owns the solar panels
> > (instead of the lease in this case), that depreciation of the
> > solar installation would apply?
> >
> > If so, this would presumably need to be pro-rated between the
> > personal use of the electricity versus the amount sold back into
> > the grid? Any other issues related to depreciation and personal
> > use?
> I guess you could calculate which portion of the solar panels were used
> to generate electricity that got sold back, and then deduct $5 per
> square foot of the panels. :-)
>
> --
> Stu
> http://DownToEarthLawyer.com
> --
If the panels were owned outright, I would calculate the depreciation on the basis of percentage of electrical output used personally vs. that sold to the utility company - an approach similar to business use of a car.
> Tom Russ <tar...@google.com> wrote:
>
> > Does this mean that if one pays for an owns the solar panels
> > (instead of the lease in this case), that depreciation of the
> > solar installation would apply?
> >
> > If so, this would presumably need to be pro-rated between the
> > personal use of the electricity versus the amount sold back into
> > the grid? Any other issues related to depreciation and personal
> > use?
> I guess you could calculate which portion of the solar panels were used
> to generate electricity that got sold back, and then deduct $5 per
> square foot of the panels. :-)
>
> --
> Stu
> http://DownToEarthLawyer.com
> --
Ira Smilovitz, EA
Leonia, NJ
Taxed and Spent
Apr 14, 2021, 11:11:03 AM4/14/21
to
space? If so, that would be Schedule E.
If he is leasing from Tesla the equipment placed on his roof, then
Schedule C sounds right.
In either event, how does the math work, given he is receiving a benefit
from his consumption of electricity?
Does he pay Tesla the same amount he receives from the utility for the
electricity generated which goes out on the grid? If so, the net is
zero. If not, then what? I wouldn't be surprised if he pays Tesla more
than he gets paid for that portion of the electricity that goes out on
the grid, so he has a Schedule C loss?
ira smilovitz
Apr 14, 2021, 3:36:21 PM4/14/21
to
Ira Smilovitz, EA
Leonia, NJ
Taxed and Spent
Apr 14, 2021, 5:31:27 PM4/14/21
to
Do people with solar really report this on their taxes? Hard to believe.
ira smilovitz
Apr 14, 2021, 6:21:30 PM4/14/21
to
Ira Smilovitz, EA
Leonia, NJ
John Levine
Apr 14, 2021, 9:06:40 PM4/14/21
to
According to Taxed and Spent <nospam...@nonospam.com>:
solar credits are unique to California.
I'm in New York where I have remote net metering, in which I
conceptually rent part of a solar farm nearby and the power it
generates is credited to my electric bill, same deal as though the
solar cells were on my roof. When it generates more power than I use
(most of the summer) the credit is carried forward but is not
refundable.
--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly
>Do people with solar really report this on their taxes? Hard to believe.
I don't think there are a lot of people in this situation. I believe that refundable
solar credits are unique to California.
I'm in New York where I have remote net metering, in which I
conceptually rent part of a solar farm nearby and the power it
generates is credited to my electric bill, same deal as though the
solar cells were on my roof. When it generates more power than I use
(most of the summer) the credit is carried forward but is not
refundable.
--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly
Stuart O. Bronstein
Apr 15, 2021, 1:37:40 PM4/15/21
to
"John Levine" <jo...@taugh.com> wrote:
> According to Taxed and Spent <nospam...@nonospam.com>:
>>Do people with solar really report this on their taxes? Hard to
>>believe.
>
> I don't think there are a lot of people in this situation. I
> believe that refundable solar credits are unique to California.
>
> I'm in New York where I have remote net metering, in which I
> conceptually rent part of a solar farm nearby and the power it
> generates is credited to my electric bill, same deal as though the
> solar cells were on my roof. When it generates more power than I
> use (most of the summer) the credit is carried forward but is not
> refundable.
I would imagine that large power companies would send 1099s when they
> According to Taxed and Spent <nospam...@nonospam.com>:
>>Do people with solar really report this on their taxes? Hard to
>>believe.
>
> I don't think there are a lot of people in this situation. I
> believe that refundable solar credits are unique to California.
>
> I'm in New York where I have remote net metering, in which I
> conceptually rent part of a solar farm nearby and the power it
> generates is credited to my electric bill, same deal as though the
> solar cells were on my roof. When it generates more power than I
> use (most of the summer) the credit is carried forward but is not
> refundable.
pay for power they receive from users.
--
Stu
http://DownToEarthLawyer.com
Stan Brown
Apr 15, 2021, 4:07:50 PM4/15/21
to
On 4/5/21 11:51 AM, Stan Brown wrote:
> > > I live in California, and the solar panels on the roof generate
> > > considerably more electricity than I use. Consequently, I'll be
> > > getting a check from SoCal Edison (in the low four figures) for the
> > > electricity that I put back on the grid over the past year.
> > >
> > > The way my solar lease works, I have to pay Tesla for every kWh I
> > > generate, whether I use it myself or it goes out on the grid. Thus I
> > > will net only a few hundred dollars for the year.
On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
> > As far as I can tell, there has not been any change to the tax
> > rules (federal and CA). You are not a business so NO Schedule C.
> > The amount you netted is taxable Other Income (1040 Schedule 1
> > Line 8).
> > > I live in California, and the solar panels on the roof generate
> > > considerably more electricity than I use. Consequently, I'll be
> > > getting a check from SoCal Edison (in the low four figures) for the
> > > electricity that I put back on the grid over the past year.
> > >
> > > The way my solar lease works, I have to pay Tesla for every kWh I
> > > generate, whether I use it myself or it goes out on the grid. Thus I
> > > will net only a few hundred dollars for the year.
On Tuesday, April 13, 2021 at 1:19:43 PM UTC-4, Alan wrote:
> > As far as I can tell, there has not been any change to the tax
> > rules (federal and CA). You are not a business so NO Schedule C.
> > The amount you netted is taxable Other Income (1040 Schedule 1
> > Line 8).
On Tue, 13 Apr 2021 15:50:40 EDT, ira smilovitz wrote:
> I'm not sure I agree. The production of excess electricity is an
> ongoing activity. By selling the excess electricity for more than
> the cost to produce it, you have established that there is a profit
> motive. It doesn't need to be your primary (or even significant)
> source of income to be a business.
Thanks to everyone who responded, and to Ira especially.
> I'm not sure I agree. The production of excess electricity is an
> ongoing activity. By selling the excess electricity for more than
> the cost to produce it, you have established that there is a profit
> motive. It doesn't need to be your primary (or even significant)
> source of income to be a business.
Though SoCal Edison had told me that they'd be cutting a check for
the hefty negative balance, it turns out that was not true. They get
you coming and going. The _actual_ check I'll get from them will be
at 2.7 cents a kWh, not the 23 cents they charge for the power I
generate.
This puts the payment to me for unused solar electricity in the $300-
$400 range, versus about $2000 paid to Tesla over the same period.
(I use roughly 10% of the generated power. I can't imagine what
persuaded the previous owners to put in the solar panels. None of the
appliances in the house run on electricity; they're all propane.)
So if this is a Schedule C business, it's going to show a loss every
year, to the tune of $1500 or so. I wouldn't mind reducing my taxable
income in that way, but can I really do that? I thought a Schedule C
business couldn't just keep showing losses indefinitely.
--
Stan Brown, Tehachapi, California, USA https://BrownMath.com/
https://OakRoadSystems.com/
Shikata ga nai...
Stuart O. Bronstein
Apr 15, 2021, 6:43:00 PM4/15/21
to
Stan Brown <the_sta...@fastmail.fm> wrote:
> Though SoCal Edison had told me that they'd be cutting a check for
> the hefty negative balance, it turns out that was not true. They
> get you coming and going. The _actual_ check I'll get from them
> will be at 2.7 cents a kWh, not the 23 cents they charge for the
> power I generate.
I'm not familiar with the rules, but I'd think they should pay you at
> Though SoCal Edison had told me that they'd be cutting a check for
> the hefty negative balance, it turns out that was not true. They
> get you coming and going. The _actual_ check I'll get from them
> will be at 2.7 cents a kWh, not the 23 cents they charge for the
> power I generate.
least what their cost is to generate other electricity that they
have.
> This puts the payment to me for unused solar electricity in the
> $300- $400 range, versus about $2000 paid to Tesla over the same
> period. (I use roughly 10% of the generated power. I can't imagine
> what persuaded the previous owners to put in the solar panels.
> None of the appliances in the house run on electricity; they're
> all propane.)
>
> So if this is a Schedule C business, it's going to show a loss
> every year, to the tune of $1500 or so. I wouldn't mind reducing
> my taxable income in that way, but can I really do that? I thought
> a Schedule C business couldn't just keep showing losses
> indefinitely.
you seldom if ever make a profit. But if you know with a high degree
of certainty that you're never going to make a profit, then it's a
hobby, and you can't deduct more than what you get.
--
Stu
http://DownToEarthLawyer.com
Taxed and Spent
Apr 15, 2021, 6:53:01 PM4/15/21
to
hobby.
ira smilovitz
Apr 15, 2021, 7:08:02 PM4/15/21
to
Ira Smilovitz, EA
Leonia, NJ
ira smilovitz
Apr 15, 2021, 7:08:02 PM4/15/21
to
Ira Smilovitz, EA
Leonia, NJ
Stan Brown
Apr 15, 2021, 10:08:12 PM4/15/21
to
On Thu, 15 Apr 2021 19:04:33 EDT, ira smilovitz wrote:
> Something doesn't seem right. Using the information you've
provided, you're paying a net of $1600 for electricity ($2000 paid to
Tesla less $400 received). Based on your estimate of $400 received at
$.027/kWh sold, you have sold somewhat less than 15000 kWh. If you
use 10% of the generated electricity, you're using ~1600 kWh. If you
bought the electricity directly, it would cost you 1600*.23 = <$400.
It seems to me that you should cancel your contract and have Tesla
remove the solar cells.
Would that I could. I had to assume the solar contract signed by the
> Something doesn't seem right. Using the information you've
provided, you're paying a net of $1600 for electricity ($2000 paid to
Tesla less $400 received). Based on your estimate of $400 received at
$.027/kWh sold, you have sold somewhat less than 15000 kWh. If you
use 10% of the generated electricity, you're using ~1600 kWh. If you
bought the electricity directly, it would cost you 1600*.23 = <$400.
It seems to me that you should cancel your contract and have Tesla
remove the solar cells.
previous owners, and it provides that the contract can only be
canceled by buying it out, basically for the net present value of all
the money Tesla expects to get until year 20, i.e. for the next 16
years.
--
Stan Brown, Tehachapi, California, USA https://BrownMath.com/
https://OakRoadSystems.com/
Shikata ga nai...
--
Stan Brown
Apr 16, 2021, 3:09:17 PM4/16/21
to
On Thu, 15 Apr 2021 19:07:19 EDT, ira smilovitz wrote:
>
> On Thursday, April 15, 2021 at 6:53:01 PM UTC-4, Taxed and Spent wrote:
> > On 4/15/2021 1:02 PM, Stan Brown wrote:
> > > So if this is a Schedule C business, it's going to show a loss every
> > > year, to the tune of $1500 or so. I wouldn't mind reducing my taxable
> > > income in that way, but can I really do that? I thought a Schedule C
> > > business couldn't just keep showing losses indefinitely.
> > >
> > Yes, it can, as long as there is a profit motive and it is not merely a
> > hobby.
>
>
> On Thursday, April 15, 2021 at 6:53:01 PM UTC-4, Taxed and Spent wrote:
> > On 4/15/2021 1:02 PM, Stan Brown wrote:
> > > So if this is a Schedule C business, it's going to show a loss every
> > > year, to the tune of $1500 or so. I wouldn't mind reducing my taxable
> > > income in that way, but can I really do that? I thought a Schedule C
> > > business couldn't just keep showing losses indefinitely.
> > >
> > Yes, it can, as long as there is a profit motive and it is not merely a
> > hobby.
>
> I know of a dog breeder that has consistently lost high 5 figures each year and has survived several IRS audits. Not showing a profit shifts the burden to the taxpayer to prove a profit motive.
Perhaps I'm being too timid, but based on
https://www.irs.gov/pub/irs-utl/2016ntf-for-profit-activity-hobby.pdf
I don't really think I could establish a profit motive.
--
Stan Brown, Tehachapi, California, USA https://BrownMath.com/
https://OakRoadSystems.com/
Shikata ga nai...
ira smilovitz
Apr 16, 2021, 9:54:44 PM4/16/21
to
On Friday, April 16, 2021 at 3:09:17 PM UTC-4, Stan Brown wrote:
> On Thu, 15 Apr 2021 19:07:19 EDT, ira smilovitz wrote:
> >
> > On Thursday, April 15, 2021 at 6:53:01 PM UTC-4, Taxed and Spent wrote:
> > > On 4/15/2021 1:02 PM, Stan Brown wrote:
> > > > So if this is a Schedule C business, it's going to show a loss every
> > > > year, to the tune of $1500 or so. I wouldn't mind reducing my taxable
> > > > income in that way, but can I really do that? I thought a Schedule C
> > > > business couldn't just keep showing losses indefinitely.
> > > >
> > > Yes, it can, as long as there is a profit motive and it is not merely a
> > > hobby.
> >
> > I know of a dog breeder that has consistently lost high 5 figures each year and has survived several IRS audits. Not showing a profit shifts the burden to the taxpayer to prove a profit motive.
> Perhaps I'm being too timid, but based on
> https://www.irs.gov/pub/irs-utl/2016ntf-for-profit-activity-hobby.pdf
> I don't really think I could establish a profit motive.
> --
> Stan Brown, Tehachapi, California, USA https://BrownMath.com/
> https://OakRoadSystems.com/
> Shikata ga nai...
> --
I wasn't trying to suggest that *you* could show a profit motive to deduct the losses, just that with the right set of circumstances, it is possible to do so. It's just another situation where one can't make an absolute statement when it comes to taxes.
> On Thu, 15 Apr 2021 19:07:19 EDT, ira smilovitz wrote:
> >
> > On Thursday, April 15, 2021 at 6:53:01 PM UTC-4, Taxed and Spent wrote:
> > > On 4/15/2021 1:02 PM, Stan Brown wrote:
> > > > So if this is a Schedule C business, it's going to show a loss every
> > > > year, to the tune of $1500 or so. I wouldn't mind reducing my taxable
> > > > income in that way, but can I really do that? I thought a Schedule C
> > > > business couldn't just keep showing losses indefinitely.
> > > >
> > > Yes, it can, as long as there is a profit motive and it is not merely a
> > > hobby.
> >
> > I know of a dog breeder that has consistently lost high 5 figures each year and has survived several IRS audits. Not showing a profit shifts the burden to the taxpayer to prove a profit motive.
> Perhaps I'm being too timid, but based on
> https://www.irs.gov/pub/irs-utl/2016ntf-for-profit-activity-hobby.pdf
> I don't really think I could establish a profit motive.
> --
> Stan Brown, Tehachapi, California, USA https://BrownMath.com/
> https://OakRoadSystems.com/
> Shikata ga nai...
> --
Ira Smilovitz, EA
Leonia, NJ
Alan
Apr 21, 2021, 9:22:05 PM4/21/21
to
On 4/14/21 6:06 PM, John Levine wrote:
> According to Taxed and Spent <nospam...@nonospam.com>:
>> Do people with solar really report this on their taxes? Hard to believe.
>
> I don't think there are a lot of people in this situation. I believe that refundable
> solar credits are unique to California.
>
> I'm in New York where I have remote net metering, in which I
> conceptually rent part of a solar farm nearby and the power it
> generates is credited to my electric bill, same deal as though the
> solar cells were on my roof. When it generates more power than I use
> (most of the summer) the credit is carried forward but is not
> refundable.
>
>
>
As far as I can tell, the major utilities in Northern and Southern CA
> According to Taxed and Spent <nospam...@nonospam.com>:
>> Do people with solar really report this on their taxes? Hard to believe.
>
> I don't think there are a lot of people in this situation. I believe that refundable
> solar credits are unique to California.
>
> I'm in New York where I have remote net metering, in which I
> conceptually rent part of a solar farm nearby and the power it
> generates is credited to my electric bill, same deal as though the
> solar cells were on my roof. When it generates more power than I use
> (most of the summer) the credit is carried forward but is not
> refundable.
>
>
>
all use Net Metering. Mr. Brown appears to be stuck with a plan that is
no longer sold. Today, Tesla will only sell you (full payment or they
will finance a loan) the solar system or you can subscribe if the state
allows it. You pay Tesla an amount each month. The amount you pay has
nothing to do with being connected to the power grid or the generation
or delivery of electrical power from the grid. Tesla gets the investment
tax credit. The homeowner can cancel at any time. The homeowner can
resubscribe at any time. The homeowner can ask Tesla to remove the
panels if they so desire. Tesla will charge for the removal.
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