Question

A taxpayer is building a new home and had a solar water heater installed in 2009, but the home was not ready to be occupied until early 2010. Can they take the residential energy credit?

Answer 1

Eligibility for the residential energy tax credit depends on when the solar water heater was placed in service and specific tax legislation. For the scenario described, the homeowner should consult tax laws or a professional to confirm if they can claim the credit for 2009 or 2010.

Step-by-step explanation:

The tax credit eligibility for residential energy improvements, such as the installation of a solar water heater, typically depends on the timing of when the system is placed in service. The key factor is whether the solar water heater was installed and operational in a tax year that allows for the residential energy credit.

In general, if the solar water heater was installed in 2009 but the home was not occupied until 2010, the homeowner may need to look at the specific tax legislation relevant to that period to determine if the credit can be taken for the year of installation or the year when the home was first occupied. There have been various incentives for solar and energy-efficient home improvements over the years, including tax credits.