Cherrytree Group Blog

Investment Tax Credit History and Future

[fa icon="calendar'] Jul 20, 2018 4:57:46 PM / by Samuel Kirshenbaum posted in ITC, Investment Tax Credit, Cherrytree Group, Federal Tax Credit, federal, Tax credits

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The investment tax credit permits businesses to deduct a specified percentage of certain investment costs from their tax liability, becoming a powerful tool that subsidizes business investment, thereby promoting the market.

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Sources of Passive Income

[fa icon="calendar'] Jul 13, 2018 3:43:41 PM / by Samuel Kirshenbaum posted in Passive Income, Tax credits, Cherrytree Group, Renewable Energy, Investment Tax Credit, federal tax credits, Historic Rehabilitation Tax Credit

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The most common form of wealth stems from active income, money earned from performing a service. This is capital made from but is not exclusive to jobs providing salaries, tips, or commission. But many times, the public hears of enigmatic stories about immense financial growth through various means of passive income.

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Changing the Game: The Future of Tax Credits

[fa icon="calendar'] Jul 13, 2018 3:03:51 PM / by Warren Kirshenbaum posted in Tax planning, tax credit, Cherrytree Group, warren kirshenbaum, family office, federal tax credits, Investment Tax Credit, Historic Rehabilitation Tax Credit, Passive Income, IRS Guidelines, Renewable Energy, Federal Tax Credit, Tax credits, opportunity zones

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These are exciting times in the tax credit world!  In addition to tax cuts, the 2017 Tax Reform brought about other significant changes, including “Opportunity Zones”, which are a new concept that can potentially link tax credit projects and capital gain deferrals in a single deal.

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Tax Credits in the Recent News

[fa icon="calendar'] Jun 29, 2016 3:47:42 PM / by Warren Kirshenbaum posted in Investment Tax Credit, tax credit

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Our ever evolving world of tax credits has recently generated some interesting press. Today’s blog post will highlight some recent tax credit news.

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2015 Update on the Investment Tax Credit

[fa icon="calendar'] Dec 17, 2015 11:12:46 AM / by Warren Kirshenbaum posted in Investment Tax Credit

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 Is a 2016 Omnibus Spending Bill in the works?

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What's next for the Investment Tax Credit as the 2016 sunset date approaches?

[fa icon="calendar'] Jun 19, 2015 3:00:00 PM / by Lillian Clark posted in Investment Tax Credit, Renewable Energy

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     During the recession, President Obama passed legislation that increased the Investment Tax Credit (ITC) on certain technologies, such as solar photovoltaic systems, from 10% to 30%.  However, the eligible ITC on such technologies will revert back to 10% on of December 31, 2016.  As this 2016 sunset date draws closer, the renewable energy industry is beginning to plan for the impending change.  The general thinking behind this sunset date is that by 2016 the renewable energy industry will be established enough that it can continue to function without the current level of government assistance. 

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Top Five Reasons to Invest in Federal Tax Credits

[fa icon="calendar'] May 4, 2015 4:30:00 PM / by Warren Kirshenbaum posted in Historic Rehabilitation Tax Credit, Investment Tax Credit, federal tax credits, Renewable Energy, Federal Tax Credit

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Have you ever thought about investing in federal tax credits but weren’t sure how it works?

The fact that you even are familiar with tax credits and know that they can be an investment opportunity puts you ahead of the curve.  Perhaps the biggest barrier to entry with regards to investing in federal tax credits is lack of industry knowledge about tax credits and how strong an investment they can be.

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To get started, let’s go over the tax credit basics.

A tax credit is a dollar for dollar credit against taxes owed to the federal government.  As a tax credit can be used to offset (or pay) your federal taxes, as if you had written a check to the federal government, a tax credit has a value of $1.00 per tax credit.

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Political headwinds for renewable energy?

[fa icon="calendar'] Apr 3, 2015 12:00:00 PM / by Warren Kirshenbaum posted in Investment Tax Credit, Renewable Energy, Federal Tax Credit

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Without Congessional action, on December 31, 2016, the Investment Tax Credit (ITC) for renewable energy installations is set to revert back to 10% from its current 30% level.  

The ITC has been at 30% since 2008 when recession related legislation kicked in and increased the tax credit to its current level.  The 30% tax credit, together with the MACRS rules allowing depreciation of the equipment in full over a 5-year period have stimulated the industry and led to an enormous increase in the installation and generation of renewable energy.  

Renewable energy as a source of energy remains a small piece of the overall supply of energy, due to the relative infancy of the industry and the production cost of renewable energy as compared to other sources of power generation.

 Infrastructure and equipment costs, such as photovoltaic panels in solar arrays have come down drastically in price, which has narrowed the gap in production costs, but there is still a ways to go.  The industry is not at the point yet where it can survive without subsidies, and, therefore, a 30% ITC, as well as more market certainty that the 30% ITC would be around for at least 5-8 years is necessary.  

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Alternative Sources of Passive Income

[fa icon="calendar'] Jun 30, 2014 11:48:00 AM / by Lillian Clark posted in Historic Rehabilitation Tax Credit, Investment Tax Credit, Passive Income, federal tax credits

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     Perhaps the most well-known form of passive income comes from Real Estate, specifically from rental income.  The scope of passive income however, is much broader than just the Real Estate market.  The Internal Revenue Service (IRS) recognizes passive income as any, “income received on a regular basis [from an activity], in which you do not materially participate”.

     With the advent of the internet, social media, and the growing popularity of blogs, a relatively new source of passive income has emerged.  Today, “affiliate marketing” which is typically generated when targeted advertisements are placed on high traffic websites, has become a major revenue source for individuals with popular websites and blogs. When readers click advertisement links and/or make purchases from a website, the operator of the site makes a small profit, hence the term, “affiliate marketing”.  For popular sites, this profit can accumulate into quite a substantial amount of passive income.

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New IRS Guidelines Provide Additional Tax Planning Strategies to Real Estate Professionals

[fa icon="calendar'] Mar 21, 2014 11:54:00 AM / by Yelena Tsvaygenbaum posted in Historic Rehabilitation Tax Credit, Investment Tax Credit, federal tax credits, IRS Guidelines

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Special To Banker & Tradesman

     The Federal Historic Preservation Tax Incentive Program, which was established in 1976, promotes historic preservation by encouraging private entities to rehabilitate historic buildings, turning underutilized or even abandoned buildings to vibrant offices, rental units or retail stores. The tax incentive provides private investors with a tax credit in the amount of 20 percent of qualified expenses incurred rehabilitating historic structures, or 10 percent of expenses rehabilitating structures that are not deemed “historic,” but were built before 1936. According to the National Park Service, which administers the program in partnership with the Internal Revenue Service, tens of thousands of structures have been rehabilitated, representing billions of dollars of private investment.
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