Instead of client’s paying their taxes per the status quo, clients purchase solar assets from Inception via an arms length asset sale. The assets are installed on residential or commercial properties. Since the client owns 100% of the asset, they have the right to claim the solar Investment Tax Credit (ITC) and depreciation benefits at the Federal and State level.

A prepaid PPA is a 20 year contract where the property host agrees to purchase all electricity generated from the solar asset, but rather than paying monthly as you go, the host customer prepays for 100% of the expected solar production upfront. As a result, the client purchasing the asset bears zero payment or credit risk.

Click here for detail on the solar ITC.

Click here for detail on bonus depreciation.

No, this is not a Fund. Each client will set up a dedicated legal entity (ex. LLC) that will act as of the purchaser of the assets via an arms length Bill of Sale.

a) Schedule C, 1 and 3

b) Form 3800

c) Form 3468

Yes, once a client has maximized their use of ITCs in the current tax year, it is possible to carry back up to 3 years prior.

There is no Material Participation requirement if the client seeks to apply ITCs to offset passive income. If a client is seeking to apply ITCs against active income, the client’s business entity must satisfy the ‘100 Hour Rule.’

This means the client must participate in a minimum of 100 hours a year in the management of their entity, and no one other than the person may contribute more than 100 hours in the management of that business. The client must maintain contemporaneous records to evidence that the above criteria are satisfied.

The solar ITC, one of dozens of General Business Credits, can offset up to 75% of the client’s Federal tax liability. In addition, the Federal and State depreciation expense lowers the client’s taxable income.

Institutional Investors and corporations have transacted billions of dollars with this strategy over the past several decades. Due to the explosive growth of the solar industry, combined with Inception’s turnkey process, this strategy is now available to private clients.

Yes. We can schedule a call with our corporate accountant and legal counsel to answer any further questions you may have.

The transaction structure is an arms length asset sale between willing seller (Inception) and willing buyer (Client) as documented via a Bill of Sale. The basis for depreciation is the asset purchase price then adjusted by the applicable Federal Bonus and State Bonus or MACRS schedule.

Letter of Intent to reserve assets for your client.

Advisory Agreement to enter into a contractual relationship with your client and Inception Financial. This will outline the expectations and obligations for both parties, including responsibilities, compensation, confidentiality, and the assignment of work.

Asset Purchase Agreement to legally agree on the sale and purchase of a business's assets (solar assets), defining terms and transfer of ownership.

Power Purchase Agreement (PPA) in which there are two types.

The first is a Power Purchase Agreement is a contract whereby a Property Host agrees to purchase power from a solar asset that will be installed on their property.

The second is a identical to a PPA with the exception that the Property Host makes one large single payment instead of monthly payments- they are paying for all the power in advance.

There are several key considerations:

a) Current year Federal liability (ex. 2023)

b) Previous years liability and/or taxes paid (ex. 2020-2022)

c) The solar ITC can offset up to 75% of the total Federal liability