Help Me With Claiming Tax Credits for a Dual-Use Property

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Dear Brass Tax Presentations,

A prospective client and a property that is 50% his primary residence and 50% rental property. Can we claim half of the credit as a business credit and half as an energy-efficient credit?

Thanks for your help.

From Brass Tax Presentations

If 20% or less of the home is rental, then all of it should be claimed as a personal credit using the residential clean energy credit. If more than 20% of the home is rental (which in your case it is), then you need to allocate the ratable share of the cost to the personal credit (residential clean energy credit) and the share allocable to the rental as the business credit (Energy Credit component of the Investment Tax Credit). That rule comes from IRC Section 25D(e)(7).

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