Tax Law (Questions About Taxes)/Transfer asset to S Corp


This might be similar to the earlier "donate car to S corp." post except for the NV Energy and IRS tax credits (solar credit and investment depreciation) explained below...  

I purchased about $10,000 in solar panels and related equipment on my personal credit card with the intent to transfer it to my S Corp which owns the building where I will install the solar system.  The installation will qualify for an NV Energy subsidy and the 2013 IRS 50% bonus depreciation deduction.  

Can I just contribute the equipment at its actual purchase value  to the S Corp as paid in capital similar to a cash contribution, or are there special forms required for the IRS?  Any negative tax implications?  Is there a better way to do this?  

Thanks in advance,

A careful read of the credits require purchase from, and installation by a licensed solar contractor.

Government doesn't really ever want us individuals to be successful, they just want us to keep trying.

So your plan would negate the value of the panels and only get a rebate on the labor.

But to answer your question:
Yes, you can "Capitalize" the solar panels, just like you capitalized your start up costs. To inform the IRS you would include that transaction on the tax return for the S-Corp.

Is there a better way? There is a way, but the cost might meet or exceed your net savings on the credits. It really depends on how good a deal you got on the equipment. I think these are "within reason" numbers: If your purchase is 8-10kw of "System" (panels, inverters, etc.) and the market value is double that (or more), then it is worth looking at. If you just have panels that you bought at $1.00-1.25 a kilowatt, then the retail cost of the other equipment must be factored in, and that may be at low or no margin, the net tax savings might not be as much.

It'll take some time and understanding, and some work. If you want to look at where and how you can "net" in this deal and possibly in your S-Corporations profits, then call me and we can get a little closer to a true assessment.

Richard Fritzler
the Business Designers
702 792-3392

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Richard Fritzler


Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.


I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

National Small Business Owners Association.
Contributing author to "The Corporate Standard Newsletter".

Contributing author to "The Corporate Standard Newsletter".

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

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