Investment Energy Credit

I'm not sure what credit you are talking about.

This is what I found:

IRS releases frequently asked questions about energy efficient home improvements and residential clean energy property credits IR-2022-225, December 22, 2022

Frequently asked questions about energy efficient home improvements and residential clean energy property credits FS-2022-40, December 2022

The short answer is that the taxpayer may take the credits if he uses the home as a primary residence. In the case of a second home, certain credits apply but others do not. If the taxpayer making the qualifying improvements is the taxpayer, he may take the applicable credits. If the landlord made the improvements, there are no credits available to take.

I hope you weren't asking about something else entirely different.

Actually I am talking about something entirely different. I'm talking about the investment tax energy credit under section 48 of the Tax Code. This is not for a principal residence but for rental property.

I looked at the instruction for Form 3468. It only refers to rental property when talking about qualified rehabillitation expenditures, and that particular credit is only available for certified historical structures. I suspect this means that all rental properties qualify for the energy credit because that limitation is not present. But I haven't been able to find anything specific.

is the resident tenant

Sorry about that.

I found this on page 3 of the instructions. Does this apply to your situation?

Part I--Information Regarding the Election To Treat the Lessee as the Purchaser of Investment Credit Property

Generally, for purposes of eligibility for and figuring the amount of the investment credit, a lessor of property may elect to treat the lessee as having acquired the property. Once the election is made, the lessee will be entitled to an investment credit for that property for the tax year in which the property is placed in service and the lessor will not be entitled to such a credit.

If the leased property is disposed of, or otherwise ceases to be investment credit property, the property will generally be subject to the recapture rules for early dispositions.

The lessor will provide the lessee with all the information needed to complete lines 11h and 11i, if applicable.

For information on making the election, see section 48(d) (as in effect on November 4, 1990) and related regulations. For limitations, see sections 46(e)(3) and 48(d) (as in effect on November 4, 1990).

Thanks Adam. No, I don't think that helps. But looking at the 3468, it's pretty clear that it contemplates real estate qualifying for the credit. And this is an investment tax credit, not a homeowner credit. So while it doesn't say so directly, I think it's safe to assume taking the credit on a rental property works.

The following from the Bradford Tax Institute answers the query.