Question

Solar on Primary Residence/Partial Rental

Forum|Forum|1 year ago
January 7, 2025
1 reply
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We are currently renting out about 45% of our primary residence. While our renters were living with us we installed solar panels paid for via a loan. Does this count as a home improvement where we could deduct 45% of the cost of the panels, much the same we would deduct the cost of installing a new roof for example? I read something about capital improvements being excluded however energy capital improvements still being eligible to deduct. If we can deduct the cost of the panels (the 45%), can we still take the federal tax credit for the panel install cost?

Thanks!

ItsDeductible Online

R

RobertB4444

Because you are using your home 45% as a rental then you are entitled to take 55% of the energy credit. The rental portion of your house does not qualify for the energy credit.

However, any actual expenses for this year are deductible on the rental portion. The portion paid for by the loan is not deductible.

You can capitalize the total rental portion of the loan over the 27 and a half year rental real estate period.

@Monzh

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