Tax equity investments in 2023 were about $20 billion annually. To meet the goals of the Inflation Reduction Act (IRA), “many forecasters estimate that tax equity will need to increase […] to over $50 billion.”...more
10/9/2024
/ Clean Energy ,
Energy Projects ,
Energy Sector ,
Energy Tax Incentives ,
Inflation Reduction Act (IRA) ,
Investment Tax Credits ,
Production Tax Credit ,
Renewable Energy ,
Solar Energy ,
Tax Credits ,
Tax Equity ,
Wind Power
What is “monetization”? Monetization is the process by which property is converted into money or something else of value. In the context of the Inflation Reduction Act of 2022 (IRA), certain provisions can allow entities that...more
9/25/2024
/ Energy Projects ,
Energy Sector ,
Energy Tax Incentives ,
Inflation Reduction Act (IRA) ,
Internal Revenue Code (IRC) ,
Investment Tax Credits ,
IRS ,
Monetization ,
Production Tax Credit ,
Renewable Energy ,
Tax Credits ,
Tax Exempt Entities ,
Tax Incentives ,
Tax Liability
What is the Low-Income Communities Bonus Credit? The Low-Income Communities Bonus Credit available through the Inflation Reduction Act of 2022 (IRA) is designed to increase the siting of, and access to renewable energy...more
9/19/2024
/ Clean Energy ,
Competitive Bidding ,
Economic Development ,
Energy Projects ,
Energy Sector ,
Housing Developers ,
Inflation Reduction Act (IRA) ,
Internal Revenue Code (IRC) ,
Investment Tax Credits ,
IRS ,
Production Tax Credit ,
Renewable Energy ,
Solar Energy ,
Tax Credits ,
Wind Power
What is the purpose of the Energy Community Bonus Credit? The Inflation Reduction Act (IRA) introduced the Energy Community Bonus Credit to encourage renewable energy project developers to locate their facilities and energy...more
9/11/2024
/ Brownfield Properties ,
Clean Energy ,
Department of Energy (DOE) ,
Energy Projects ,
Energy Sector ,
Energy Tax Incentives ,
Inflation Reduction Act (IRA) ,
Investment Tax Credits ,
IRS ,
NAICS ,
Prevailing Wages ,
Production Tax Credit ,
Tax Credits
What is the purpose of the Domestic Content Bonus Credit? The Inflation Reduction Act (IRA) introduced the Domestic Content Bonus Credit to provide an additional credit amount to taxpayers that meet its requirements. The...more
9/9/2024
/ Clean Energy ,
Domestic Corporations ,
Energy Projects ,
Energy Sector ,
Energy Tax Incentives ,
Inflation Reduction Act (IRA) ,
Investment Tax Credits ,
IRS ,
Production Tax Credit ,
Renewable Energy ,
Supply Chain ,
Tax Credits ,
Tax Incentives
Why did Congress provide bonus credits to a facility or a project that pays its workers “prevailing wages” and hires apprentices? Congress viewed the Inflation Reduction Act (IRA) as a way to not only move the United States...more
9/3/2024
/ Apprenticeships ,
Energy Projects ,
Energy Sector ,
Inflation Reduction Act (IRA) ,
Investment Tax Credits ,
IRS ,
Prevailing Wages ,
Production Tax Credit ,
Tax Credits ,
Tax Incentives ,
Wage and Hour
Why did the Inflation Reduction Act (IRA) reduce the base amounts of the energy tax credits? The IRA reduced base credit amounts from their pre-IRA levels to encourage energy projects to meet Congressional policy objectives....more
8/28/2024
/ Energy Projects ,
Energy Sector ,
Inflation Reduction Act (IRA) ,
Infrastructure ,
Investment Tax Credits ,
IRS ,
Prevailing Wages ,
Renewable Energy ,
Solar Energy ,
Tax Credits ,
Tax Incentives ,
Wind Power
What is a Production Tax Credit (PTC)?
A Production Tax Credit (PTC) is a per kilowatt-hour (kWh) tax credit for electricity generated by solar and other qualifying clean technologies for the first 10 years of a system’s...more
8/27/2024
/ Carbon Emissions ,
Clean Energy ,
Energy Projects ,
Energy Sector ,
Greenhouse Gas Emissions ,
Hydrogen Power ,
Inflation Reduction Act (IRA) ,
Investment Tax Credits ,
IRS ,
Production Tax Credit ,
Proposed Regulation ,
Renewable Energy ,
Solar Energy ,
Supply Chain ,
Tax Credits ,
Tax Incentives ,
Wind Farm
Signed into law on August 16, 2022, the Inflation Reduction Act (IRA) is the most significant long-term commitment made by the U.S. government to encourage and support a clean energy future. The IRA modifies and revises the...more
8/16/2024
/ Carbon Emissions ,
Clean Energy ,
Climate Change ,
Energy Projects ,
Energy Sector ,
Energy Tax Incentives ,
Greenhouse Gas Emissions ,
Incentives ,
Inflation Reduction Act (IRA) ,
Renewable Energy ,
Solar Energy ,
Supply Chain ,
Tax Credits
What is a hedged executory contract? A “hedged executory contract” is another type of transaction that is eligible for integration under Code Section 988(d). A hedged executory contract results when a taxpayer enters into an...more
6/12/2024
/ Capital Assets ,
Capital Gains ,
Capital Losses ,
Financial Transactions ,
Foreign Currency ,
Foreign Entities ,
Hedges ,
Hedging ,
Internal Revenue Code (IRC) ,
IRS ,
Securities ,
Tax Planning
Are there special hedging provisions for section 988 transactions? Yes. In addition to the business hedging rules I address in our earlier Q&A with Andie series, a special hedging provision is available at Code section 988(d)...more
6/5/2024
/ Capital Assets ,
Capital Gains ,
Capital Losses ,
Financial Transactions ,
Foreign Currency ,
Foreign Entities ,
Hedges ,
Hedging ,
Internal Revenue Code (IRC) ,
IRS ,
Tax Planning
Which transactions qualify as section 988 transactions?
In section 988 transactions, the taxpayer makes payments or receipts denominated in or determined by reference to one or more nonfunctional currency. ...more
Are all foreign currency gains taxable?
No. Under a de minimis exemption individual taxpayers with foreign currency gains of $200 or less on a “personal transaction” do not need to report them....more
Navigating the federal taxation of foreign currency can be compared to trying to cross a perilous sea. Both involve unexpected rough patches, serious difficulties, and frustrating complexity....more
Do the tax hedge rules apply to consolidated tax groups? Yes. The Treasury Regulations treat members of a consolidated corporate group as divisions of a single entity. As a single entity, the risks and positions of all group...more
5/3/2024
/ Business Taxes ,
Capital Gains ,
Capital Losses ,
Corporate Taxes ,
Hedges ,
Hedging ,
Income Taxes ,
Popular ,
Securities Dealers ,
Tax Planning ,
Tax Returns
What are the tax accounting rules for hedges? Whether or not a qualified tax hedge is properly identified, it must be tax accounted for under a method that clearly reflects income. The timing of gains and losses on hedges...more
When must a hedge be identified and accounted for tax purposes? Taxpayers must identity each hedging transaction and the item it hedges. A taxpayer must clearly identify a hedging transaction “before the close of the day on...more
What is the “tax character” of a hedge? A taxpayer receives ordinary gain or loss on qualified hedges that have been properly identified in accordance with Treasury Regulation § 1.1221-2. This allows a taxpayer to ensure that...more
4/12/2024
/ Asset Management ,
Business Taxes ,
Capital Losses ,
Corporate Taxes ,
Debt ,
Hedges ,
Hedging ,
Interest Rates ,
Internal Revenue Code (IRC) ,
Investment ,
Reporting Requirements ,
Risk Management ,
Tax Planning
Enterprise Risk Management is widely used in many industries and businesses. Risk managers use increasingly sophisticated approaches, methods, analytics, and frameworks to manage complex, interrelated, and interconnected...more
Are there differences in the way in which weather derivatives and weather insurance are taxed? Yes. Weather insurance products, including parametric insurance, are taxed as insurance; and derivatives are taxed in accordance...more
3/27/2024
/ Business Expenses ,
Business Interruption ,
Business Losses ,
Climate Change ,
Derivatives ,
Insurance Industry ,
Internal Revenue Code (IRC) ,
Policy Terms ,
Popular ,
Property Damage ,
Risk Management ,
Severe Weather
Are there differences in the way in which derivatives and insurance contracts are regulated? Yes. Weather derivatives and insurance contracts are subject to totally different regulatory regimes. Derivatives are subject to the...more
3/22/2024
/ Casualty Insurance ,
CFTC ,
Climate Change ,
Commodity Exchange Act (CEA) ,
Derivatives ,
Dodd-Frank ,
Insurance Contracts ,
Insurance Industry ,
Property Insurance ,
Risk Management ,
Safe Harbors ,
Severe Weather ,
Swaps
In Part I of this series on weather and climate risk management, I reviewed the context within which organizations seek to manage climate and weather-related risks. With extreme weather events becoming more common, there are...more
3/20/2024
/ Business Interruption ,
Climate Change ,
Environmental Social & Governance (ESG) ,
Indemnity Insurance ,
Insurance Industry ,
Natural Disasters ,
Over The Counter Derivatives (OTC) ,
Policy Terms ,
Risk Management ,
Risk Mitigation ,
Severe Weather
2023 was the hottest year on record. Not only the hottest since U.S. meteorological recordkeeping began in 1850, but according to Scientific American, 2023 was also “the hottest temperature that our planet has experienced in...more
In November 2023, almost 11,000 cryptocurrencies and digital tokens were listed on CoinMarketCaps.com. In addition, tens of thousands of non-fungible tokens (NFTs) are sold daily on various crypto exchanges and NFT platforms....more
12/27/2023
/ Abandoned Property ,
Capital Losses ,
Cryptoassets ,
Cryptocurrency ,
Digital Assets ,
Non-Fungible Tokens (NFTs) ,
Ponzi Scheme ,
Securities ,
Tax Deductions ,
Tax Planning ,
Theft ,
Trading Platforms
Taxpayers can receive significant tax benefits when donating cryptocurrency and other appreciated digital assets to a charity. This article looks at some key considerations to keep in mind as you consider all your options....more