Depreciation For Sale

If your looking to offset your income by buying depreciation we have a contact for you. Once we sign the appropriate NDA’s we will release the name of our client. If you have any questions about purchasing depreciation you can direct your questions to Nick Palumbo at nick@greencorefunding.com

The firm that we represent operates out of Phoenix Arizona and markets a unique solar leasing program that takes advantage of this 2010 Tax Relief Act -(1603 section 707) The company currently leases solar systems primarily to residential and light commercial properties and allows the property owners to enjoy the 20% energy savings guaranteed by the Electric companies and for our client to keep all tax benefits namely, section 179 depreciation.

Since our client owns the solar equipment, they also owns the depreciation. Recent changes in the Federal tax code allows you to benefit from the sale of depreciation when related to renewable energy. Renewable energy equipment depreciation can be retained and accelerated to corporate tax liability or sold to generate revenue.

The Section 179 depreciation will create a reduction in one’s taxable income that will lower the potential tax liability and alternative minimum tax.

For Example:
If a Taxpayer has a $120,000 tax liability on an income of $400,000 this year; the purchase and filing of $400,000 worth of 179 depreciation would give the taxpayer a 20% savings ($24,000 in this example) The cost for transferring this depreciation would be 80% of the taxpayers current tax liability or ($96,000 in this example) which would secure the Taxpayer a 1% membership share of our client which then allows our client to assign the company’s section 179 depreciation to the new member when buying back the share.

This transfer of 179 depreciation to the new member becomes effective at the time of filing their taxes. If the taxpayer is filing an amended return for 2010, using the example above, the IRS would refund $120,000 back to the taxpayer in the standard 15 weeks putting $24,000 back in their pockets. Or using the same example, a 2011 taxpayer would save $24,000 by investing $96,000 in clean renewable energy.

One does not have to be limited to the amount of investment as the total write off since the Principal of our client is on the note in a recourse basis that rolls over to the other partners. An individual or company in the 25% tax bracket could invest $100,000 in a membership share of our client and potentially write off $500,000.

Method of transfer using the example above
The 179 depreciation is elected to be used in the same year the solar equipment

STEP 1. Taxpayer becomes a “Class B Member” of our client by contributing 80% of taxes paid or taxes owed (in this example, $96,000) and is issued a 1065 K-1 representing a 1% member Share of our client.

STEP 2. Class B member will then accept $400,000 in section 179 depreciation credits in exchange for their 1% ownership interest. Our client will then report Class B Member on their IRS Form 1065, and provide Class B Member with IRS Form K-1 consistent with this agreement.

STEP 3. Upon filing their tax return, the Class B Members interest shall automatically transfer back to our client (or assigns) on December 31, 2011 unless otherwise agreed in writing.

In no way does this offering constitute the sale of a security. Class B Members have NO voting rights or claim to any other revenue of our client other than the agreed Section 179 depreciation.

We will have a total of $136,000,000 of available 2011 depreciation. 17.1 megawatts

136,000,000 x tax rate = total tax savings
Examples:
136,000,000 x 40% = $54,400,000
136,000,000 x 30% = $40,800,000
136,000,000 x 28% = $38,080,000

For further reading on this subject please contact Nick Palumbo at nick@greencorefunding.com or call 480-305-4028.  All responses are sent within 24 hours.