3 IN 1 ROOF is the Perfect “Safe Harbor” Solar Investment for Homestead & Rental Real Estate
WASHINGTON: The Internal Revenue Service has issued Revenue Procedure 2019-38 allowing Safe Harbor for rental real estate, including interests in mixed-use property, to be treated as a trade or business for purposes of the Qualified Business Income (QBI) deduction under section 199A of the Internal Revenue Code (section 199A deduction).
Currently the market bears only two UL 1703 certified, truly integrated solar roofing products eligible for the ITC on the entire system installation, Luma Solar and the 3 IN 1 ROOF.
“Just 2-months ago to the day, both single real rental property interests and multiple rental real properties interests can legally freeze the 30% Investment Tax Credit (ITC) for projects completing within 4- calendar years after 2019,” said Carmen Bellavia, President and CEO of 3 IN 1 ROOF Inc. “Even if the taxpayer or a Relevant Pass-through Entity (RPE) holds interest through an entity disregarded as an entity separate from its owner, such as a limited liability company with a single member, the tax credit is applicable with a few simple requirements,” he added.
According to an IRS publication on September 24, 2019, said requirements are:
- Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise.
- For rental real estate enterprises that have been in existence less than four years, 250 or more hours of rental services are performed per year. For other rental real estate enterprises, 250 or more hours of rental services are performed in at least three of the past five years.
- The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: hours of all services performed; description of all services performed; dates on which such services were performed; and who performed the services.
- The taxpayer or RPE attaches a statement to the return filed for the tax year(s) the safe harbor is relied upon.
DON’T LET THE CLOCK WIND DOWN! With barely a month left to act, the IRS Safe Harbor mandates (1) a deposit of 5% (or more) must be placed against the Solar Energy Property by December 31, 2019 to secure your 2019 Investment Tax Credit of 30% and (2) thereafter the taxpayer needs to continually move forward towards completing the installation.
The 3 IN 1 ROOF Corporation unveiled their Safe Harbor Strategic Plan allowing project developers, financers and homeowners to lock-in the 30% ITC rate for their solar installations with just the 5% Safe Harbor Deposit. The 3 IN 1 ROOF is arguably the only solar roof that avoids all risks from project or technology changes since acquiring UL / ULC 1703 certification and by embracing only solar components that will not lose value or become barriers to additional electronic selections when projects are ready to proceed. Plus the 3 IN 1 ROOF offers an optional Lifetime Warrantee coupled with High Velocity Hurricane Zone (HVHZ) and Florida product approval lending unmatched safety standards for the end-user in comparison to the competition.
NOTE – The IRS issued QBI guidance on this new deduction for pass-through entities under the Tax Cuts and Jobs Act (TCJA).
For QBI deduction purposes, pass-through entities are defined as:
- Sole proprietorships,
- S corporations,
- Single-member limited liability companies (LLCs) with one owner that are treated as sole proprietorships for tax purposes,
- Partnerships, and
- LLCs that are treated as partnerships for tax purposes.
The objective is to clarify when the QBI deduction is available for income from rental real estate enterprises.
Source: 3 IN 1 ROOF Inc.
