Should a Farmer Sell Their Energy Tax Credit

The IRS issued final regulations on the transfer of certain tax credits. Many farmers will likely sell credits since their tax liability may be low for many years.

Photo by Suzanne D. Williams on Unsplash

Many farmers are now constructing energy projects that qualify for certain income tax credits. Examples include solar, wind, methane digestors and other related projects.

Most of these projects will qualify for the investment tax credit under Section 48. This credit is usually 30% of the total cost of the project, however, if certain situations the credit can climb to 50% of the cost. The farmer is then allowed to depreciate most of the remaining cost.