federal energy efficiency tax credit for 2009

Background:

Just completed installation of a 25 SEER heatpump (similar to A/C) system. Paid $1400 minus instant utility (FPL) rebate $560, net payment $830.

Contractor gave me final invoice for $830, showing the utility rebate (which is paid back to contractor by power utility).

Contractor also gave me the AHRI Certificate form, showing reference number, date, rating and in large letters on top it states ".. This combination qualifies for federal energy efficiency tax credit when placed in service between 2/17/2009 and

12/31/2009.."

My service placement date is 12/24/2009.

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Questions:

(1) What line on form 5695 is for heatpumps ? Is it simply Line 2 ?

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(2) Which amount do I enter, the total cost of the system or the cost after utility rebate ?

(3) If the manufacturer also issues a rebate, do I deduct that also ?

forfederalenergyefficiencytaxcreditwhen placed in service between 2/17/2009 and

As far as I know, you enter the total cost after rebate. Any credit or deduction is based on what you actually paid. The store can say the pump is $5000 but they give you a $2000 discount, so for tax purposes the credit, deduction, depreciation, etc is based on $3000.

Yes. If you pay for the item in 2009 but receive the rebate in 2009, then I think you have to do a recovery. The follow sounds logical to me: Suppose you pay $3000 so you get a credit of $300, but next year you get a manufacture's rebate of $500, so in your next year's taxes you enter Other Taxes of 10% of $500 or $50. Also, after 2009 you decreased the basis of your property by the credit of $300, so after

2010 you increase it by $50.