Can a taxpayer who purchased a newly constructed home in 2009 claim the Residential Energy Credit for energy saving features that were part of the original construction? If he can, how does he determine the cost of these items if they were not designated in the contract? Does he have to reduce his cost for purposes of the First Time Homebuyer Credit by the cost of these Energy Credit elibible items?
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Did he contract to have the home constructed for him? If so, no, new construction and rentals do not qualify. -
Energy Credits - New Construction
I believe the house was in progress or completed when he contracted to buy the house.Comment
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It sounds like new construction to me, especially if he's wanting to take credit for items that are part of the original contract for the house in its entirety.
If contract is complete, he's all moved in and after the fact he decides to improve something not included in the original cost of the home, then maybe?
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Energy Credits - New Construction
I'm inclined to conclude that energy efficient features of a newly constructed home do not qualify for the Residential Energy Credit. I say this because, if they did qualify, the builder would have promoted this benefit in their sales materials and website. The builder I am dealing with in this specific situation does not mention it anywhere, nor was it mentioned to the buyer when he was negotiating the purchase.
I can't find this specific scenario mentioned in any IRS instructions or publications. In the instructions for Form 5695, under "Who Can Take the Credits", the following sentence appears:
For credit purposes, costs are treated as being paid when the original installation of
the item is completed, or in the case of costs connected with the construction or
reconstruction of your home, when your original use of the constructed or
reconstructed home begins.Comment
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The short answer is that energy credits to the homeowner are available ONLY after
he owns the house and then spends the money.ChEAr$,
Harlan Lunsford, EA n LAComment
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