| Going green is a smart moral choice, but you have to | | | | construction spectrum, it is an indication of the |
| consider the bottom line. With federal tax benefits, | | | | interest of the federal government. The credits |
| you can have your pie and eat it to. | | | | basically deal with items that reduce energy |
| The Internal Revenue Service tax code is not an | | | | consumption or use alternate energy sources. This is |
| easy thing to understand. The federal tax benefit | | | | a reflection of the desire to reduce the burning of |
| though can be found in Subtitle A, Income Taxes. It | | | | fossil fuels and the continued waste of energy in the |
| is under Chapter 1, normal taxes. You must look in | | | | country. |
| subchapter A, Determination of Tax Liability. Then | | | | The tax code is very specific about the purposes of |
| you go to part IV, Credits against Tax, and finally to | | | | the properties that qualify for the credit. They must |
| Subpart A, nonrefundable personal credits. You just | | | | relate to a building that is used as a private dwelling. |
| have to love the IRS. | | | | The water heater must also be used to heat water |
| In case you do not have the tax code handy, the | | | | for regular domestic purposes. Such luxury items as |
| tax benefit is not that complex. It allows a 30 | | | | swimming pools, hot tubs, and saunas would be |
| percent credit on any expenditure for a qualified | | | | excluded. The use of items in the structure of the |
| photovoltaic property used on a private residence | | | | building is allowed. For examples, solar panels that |
| within the tax year. It also allows a 30 percent credit | | | | constitute the roof of the structure are still covered |
| on any qualified fuel cell property used on a private | | | | under the credit provisions. |
| residence. The same 30 percent credit is allowed on | | | | This tax benefit does not cover any building done |
| a solar water heater under the same conditions. | | | | after December, 31, 2007. This means this is the last |
| This credit does have a limit of $2000 on the | | | | year to take advantage of the tax benefit as it is |
| photovoltaic and fuel cell credit, and $500 on the solar | | | | currently written. In order to be extended past this |
| water heater. The code also explains how the credit | | | | date, new legislation must be passed by congress. It |
| is to be divided in the case of multiple occupants or | | | | will be interesting to see if the tax benefit for green |
| change of ownership. Although the tax credit is | | | | construction is continued. It is generally believed such |
| limited and only covers a certain portion of the green | | | | benefits will not only be continued, but also expanded. |