Showing 3 posts from September 2010.
The IRS, in a recent private letter ruling (PLR 201035003) held that a sale of renewable energy certificates that creates value for the seller is income for tax purposes.
The private letter ruling was requested by a residential owner of renewable energy property that had sold renewable energy certificates to a local utility. Under the taxpayer’s deal with the utility, the taxpayer was required to sell all of the RECs associated with a new solar PV system to the utility in exchange for payments.
The IRS distinguished the utility’s payment for the RECs from indirect subsidies which are exempt from taxation under Section 136 of the Code. Reasoning that the sale of the RECs was like a sale of property, the IRS determined that the gain on the sale would be taxable as income to the taxpayer.
Corn prices have surged but, as Biofuels Digest reports, the culprit this time is a poor harvest and shutdown of grain exports from Russia.
U.S. ethanol production remains sluggish as low gas prices and a lack of investment capital have held back plans for new plants. In addition, Congress’ inability to extend biofuel subsidies that expired that the end of 2009 means that China has surged ahead of the rest of the G20 both in energy consumption and in clean energy investment.
Taylor English Attorney Aaron Kowan, spoke at the Reznick Group’s Real Estate and Renewable Energy Markets Forum at Lowe’s Hotel in Atlanta on August 24th.
Tax credits are a key element in many structured finance transactions involving real estate or renewable energy and Mr. Kowan’s practice focuses on ways to derive cash to fund project development from tax credits.
The Reznick Group is a national accounting firm that has been sponsoring symposiums on tax credit financings for several years. The meetings are generally attended by investors, project developers, bankers, accountants and lawyers looking for ways to structure financings for new projects.
Mr. Kowan is part of the renewable energy finance practice at Taylor English Duma which structures tax credit-driven financings for project developers, sponsors and investors.
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