Discussion:STATE TAX CREDITS
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Revision as of 14:53, 20 May 2008
Discussion Forum Index --> Basic Tax Questions --> STATE TAX CREDITS
Discussion Forum Index --> Tax Questions --> STATE TAX CREDITS
KROBINETTE (talk|edits) said: | 16 May 2008 |
| SOME STATE HAVE MULTIPLE TYPES OF TAX CREDITS AVAILABLE TO OFFSET THE STATE INCOME TAX. WOULD BE INTERESTED IN OPINIONS ON WHETHER THE PURCHASE OF THE TAX CREDIT CREATES A STATE INCOME TAX DEDUCTION ON FEDERAL SCHEDULE A - OR IF THE DEDUCTION IS AVAILABLE WHEN THE TAX CREDIT IS USED.
IS THE PURCHASE OF A STATE TAX CREDIT THE SAME AS PAYING YOUR STATE INCOME TAX FOR THE STATE INCOME TAX DEDUCTION? | |
| 16 May 2008 | |
| 1. take WesR's advice.
2. complete your profile 3. STOP TYPING IN ALL CAPS!!!!!! | |
| 17 May 2008 | |
| Krobinette, can you give us an example of a state income tax credit that can be purchased from the individual or entity that generated it and utilized by the buyer? This may be the case, for example, with some alternative energy credits, R&D, or incentive zone credits; I just don't know of any off the top of my head.
I haven't seen anything specific on this issue, but my guess is that the amount paid for the credit would not be deductible as a state income tax because it does not meet the definition of a state tax in IRC Sec. 164. See Reg. Sec. 1.164-3(a): (a) State or local taxes. A State or local tax includes only a tax imposed by a State, a possession of the United States, or a political subdivision of any of the foregoing, or by the District of Columbia. The price paid to purchase a state income tax credit earned by another taxpayer would not seem to be included in that definition. | |
| 17 May 2008 | |
| While looking for something else I found one -- the Iowa Wind Energy Production Credit is freely transferable. | |
| 19 May 2008 | |
| Here in VA we have a land preservation credit that is freely transferable. A couple years ago the credits were selling for .60 on the dollar - it was a hot market for everyone involved, given that people were putting conservation easements on land and getting a credit equal to diminished FMV. Big bucks. Millions of dollars in credits have been bought and sold. And, to date, I've heard no "official" guidance on how the purchase is treated on the federal level. A good portion I know of treated the purchase price as state tax deduction. The aggressive sorts took the credit value on Sch A. Almost always in year of purchase. I'd be curious if anyone out there has seen any guidance on the issue. | |
| 19 May 2008 | |
| Don't you just love those that ask questions and then appear to disappear? | |
Death&Taxes (talk|edits) said: | 19 May 2008 |
| Maybe he took Wes' advice, DZ! | |
| 20 May 2008 | |
| In Louisiana we have a film production credit that can be purchased for 90 cents on the dollar. | |
