Process of Selling PTCs and ITCs

The recently-published Proposed Treasury Regulations contemplate several steps for transferring PTCs and ITCs, or a portion of such eligible tax credits. After identifying, valuing the maximum credit amount, and substantiating a tax credit’s qualification, an eligible taxpayer can begin the process of transferring a tax credit by completing the following steps:

  1. The selling taxpayer must complete an electronic pre-filing registration with the IRS. The Proposed Temporary Regulations provide that, in addition to general information, the registration process will require detailed information as to tax credit characteristics (e.g., type of eligible tax credit, taxpayer’s taxable years, etc.), require support documentation concerning construction or acquisition of the energy property, as well as various additional items. Upon completing the process, the taxpayer will receive a registration number that is particular to each eligible tax credit property.
  1. Arrange a sale of a tax credit to an unrelated party for cash. While the selling taxpayer is completing step (1) a proposed sale can be arranged and distilled into an executed purchase agreement. The terms of the purchase agreement are specific to the tax credit only (i.e., accompanying depreciation is not transferable).
  1. Seller completes the necessary IRS paperwork to effect the sale (e.g., transfer election statement, make a timely transfer election) and allow for the tracking of the transferred tax credit.
  1. Parties exchange appropriate documents between the buyer and seller (e.g., registration number, a transfer election statement, etc.) including registration number and all other information necessary to claim the transferred eligible tax credit.
  1. Parties properly complete their tax returns to reflect the tax credit transfer.

If you are interested in working with us, please complete the registration form, which will allow us to (1) place you on our time-sensitive list, (2) send you further information, and (3) begin the matching process. Once we locate a suitable buyer for your needs, we will furnish buyers and sellers with a purchase agreement when a match is acceptable. We will take care of all necessary governmental notifications to ensure a proper transfer of the Tax Credit and will retain necessary records of the transaction.