Dr. Gary M. Schwarz and Marlee Schwarz overall lost in a recent Tax Court decision. It was a fascinating story. Dr. Schwarz, who had a very successful dental practice, also had a substantial amount of real estate. On some of the real estate, deer larger than usual for Texas roamed thanks to a fencing system that Dr. Schwarz had invented. This allowed for an ecotourism operation, which included hunting packages that generated a lot of revenue, but even more expenses. The silver lining of that cloud was the losses, characterized as farming, sheltered other income from dentistry and real estate.
Renewable Energy Tax Credits: An Opportunity to Sustainably Optimize Taxes
Ted Stotzer
Investment Tax Credits (“ITCs”) and Production Tax Credits (“PTCs”, and together with ITCs, “RETCs”) have existed for decades and reflect the U.S. government’s commitment to incentivizing clean energy solutions in industry and commerce. The availability of RETCs was most recently extended by the Inflation Reduction Act of 2022 (“IRA”), which fundamentally transformed policy in this space by tying such credits’ expiration to the U.S. reaching certain targets for greenhouse gas reductions. While the recent change in Executive Branch leadership casts doubt over the longevity of RETCs, a full repeal seems unlikely given the scope and scale of domestic projects which utilize and benefit from such credits. This article discusses how RETCs may benefit both buyers and sellers in an increasingly uncertain environment.
