Tax Credit Question??

[melikefire]

Does anyone know if the tax credit would apply to used stoves that meet the 75% EPA standard. Looking @ a Lopi Freedom only 1 1/2 years old?

 

[thechimneysweep]

According to the HPBA, the credit will apply to purchases of new stoves only.

 

[BrotherBart]

It is yea and verily another one of those questions that can only be answered by the IRS. The only qualification I have found is the stove must be "placed in service" after Jan. 1, 2009. No mention I have been able to find about it having to be new. Of course with most used stoves the particular model isn't ever going to be tested under the new criteria so the required letter of certification from the maker won't be available and ergo no tax credit.

Tax court rulings as to the definition of "placed in service" have always addressed business equipment for depreciation purposes. The IRS has pretty narrowly defined it to mean when the asset is completely available for use and operable for its intended purpose. This would lead one to believe a new stove purchased in 2008 and sitting on the pallet in the garage until some time in 2009 when it is installed and placed in service would be eligible for the tax credit. That is how they have ruled on business equipement. We will find out when I take the credit on that pellet stove I bought on sale last Spring but will not install until this year.

See your friendly neighborhood tax adviser on this one folks. Just like every other "grey area" in tax law it is going to be a pip and credits should not be taken on advise gleaned from non-government Internet sites.

 

[altheating]

I think you will see the requirements will require the stove/boiler to be purchased from a dealer, will require professional installation and placed into service in 2009/10. Plus meet the efficiency requirements. Everything is still up in the air as far as who will have appliances that will qualify.

 

[tjnamtiw]

It is yea and verily another one of those questions that can only be answered by the IRS. The only qualification I have found is the stove must be "placed in service" after Jan. 1, 2009. No mention I have been able to find about it having to be new. Of course with most used stoves the particular model isn't ever going to be tested under the new criteria so the required letter of certification from the maker won't be available and ergo no tax credit.

Tax court rulings as to the definition of "placed in service" have always addressed business equipment for depreciation purposes. The IRS has pretty narrowly defined it to mean when the asset is completely available for use and operable for its intended purpose. This would lead one to believe a new stove purchased in 2008 and sitting on the pallet in the garage until some time in 2009 when it is installed and placed in service would be eligible for the tax credit. That is how they have ruled on business equipement. We will find out when I take the credit on that pellet stove I bought on sale last Spring but will not install until this year.

See your friendly neighborhood tax adviser on this one folks. Just like every other "grey area" in tax law it is going to be a pip and credits should not be taken on advise gleaned from non-government Internet sites.

Don't forget that the latest ruling on the DOE website says that UNTIL the IRS issues it's ruling, any stoves placed in service prior to that date this year, will fall under the EXISTING efficiency guidelines! They did that so people stopped screaming that they couldn't sell stoves until the IRS got off their butts and did something. That means that there is nothing about requiring professional installation. If I were buying a used stove, I'd get a bill of sale and find the stove specs on the internet showing it is 75% or better and print it out, put it in my tax folder, file it next year, and forget about it until they say something. There's no sense in speculating what the IRS will come up with when you can legally do now what they say now.

 

[tjnamtiw]

I think you will see the requirements will require the stove/boiler to be purchased from a dealer, will require professional installation and placed into service in 2009/10. Plus meet the efficiency requirements. Everything is still up in the air as far as who will have appliances that will qualify.

''''IRS guidance issued before the enactment of ARRA will be modified in the near future to reflect the new energy efficiency standards. In the meantime, homeowners may continue to rely on manufacturers’ certifications that were provided under the old guidance and on Energy Star labels for exterior windows and skylights in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards.'''''

(broken link removed to http://www.irs.gov/newsroom/article/0,,id=206869,00.html)