William L. Richter - Page 11

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               As in effect for 1995, section 38(a)(2) and (b)(1) provides            
          for a credit against a taxpayer’s income tax in the amount of the           
          investment credit determined under section 46.  Section 46                  
          provides that the amount of the investment credit, as relevant              
          here, is the amount of the energy credit.  The amount of the                
          energy credit is equal to 10 percent of the basis of the energy             
          property4 placed in service during the taxable year.  Sec.                  

               4Energy property is defined in sec. 48(a)(3) as any                    
                    (A) which is–-                                                    
                         (i) equipment which uses solar energy to                     
                    generate electricity, to heat or cool (or provide                 
                    hot water for use in) a structure, * * *                          
                        *     *     *     *     *     *     *                         
                         (i) the construction, reconstruction, or erection            
                         of which is completed by the taxpayer, or                    
                         (ii) which is acquired by the taxpayer if the                
                    original use of such property commences with the                  
                    (C) with respect to which depreciation (or                        
               amortization in lieu of depreciation) is allowable, and                
                    (D) which meets the performance and quality                       
               standards (if any) which–-                                             
                         (i) have been prescribed by the Secretary by                 
                    regulations (after consultation with the Secretary                
                    of Energy), and                                                   
                         (ii) are in effect at the time of the                        
                    acquisition of the property.                                      

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Last modified: May 25, 2011