With this new schedule, calculating the rate of return on a solar project now contains more certainty as to what the return will be on each SREC. This is a big benefit to project developers and financers as now instead of an unpredictable 10% adjustment, there is a known 5% decrease each year.

Please call at 617-965-5959 with any questions.

 Rodman & Rodman is a CPA firm offering a specialty “Green Team” accounting practice dedicated to providing alternative energy producers and other businesses that pursue energy efficiency initiatives with expert counsel and services in green energy tax accounting and business strategy. Specializing in cleantech and energy/utilities technology and software, Bane Marketing & Communications provides marketing and corporate communications services for companies seeking to build brand awareness and differentiation, increase their market share, expand into new markets, and build stronger sales pipelines.

 “In addition to financial support, ACTION sponsors contribute their extensive business expertise, skills and experience to the association and its member network,” said Michael D. Ryan, ACTION President and Cofounder. “The financial management and renewable energy accounting skills of Rodman and Rodman, and the marketing communications skills of Bane Marketing will be valuable assets as ACTION continues to build its leadership in New England’s burgeoning clean technology cluster.”

 About ACTION

The Association of Cleantech Incubators of New England (ACTION) is New England’s leading network of cleantech incubators sharing the common goals of accelerating the growth and success of early-stage companies, strengthening the regional cleantech cluster, and creating more green jobs in New England.

Our network of incubators provides diverse resources and a highly- supportive hub in which entrepreneurs, business leaders, government agencies, community leaders, investors, universities, and other interested organizations can collaborate toward the successful commercialization of enterprises that will build a prosperous green economy, improve the quality of our lives and sustain the health of our environment. Visit www.actionnewengland.org or contact Michael Ryan 508-277-5211 mryan@actionnewengland.org

Tom graduated from Hofstra University, cum laude, and Fordham Law School, cum laude, where he was a member of the Law Review. Tom has extensive experience in many areas of taxation. Most recently, he has focused on business structuring for medium-sized clients, individual and entity tax planning as well as estate planning.

Tom also oversees the Rodman & Rodman Green Team, our firm’s specialty practice dedicated to providing alternative energy producers and other businesses that pursue energy efficiency initiatives with expert counsel and services in green energy tax accounting and business strategy.

In his spare time Tom enjoys playing golf with his wife and two sons while cheering for Boston’s championship sports teams. Tom can be reached at (617) 965-5959 or via email at thomas@rodmancpa.com.

 Under the new law, the reduced employee fica tax rate is 4.2% and rate for a self-employed individual remains at 10.4% for self-employment income of up to $18,350.

The Act changes are effective for remuneration received during the months of January and February in 2012 and for self-employment income for tax years beginning in 2012.

For tax years beginning in 2012, IRS instructed employers to implement the new payroll tax rate as soon as possible in 2012, but not later than January 31, 2012. If there is any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible, but not later than March 31, 2012.

Further guidance will be issued by IRS as necessary to implement the provisions of the two-month extension, including the issuance of revised employment tax forms and additional instructions.

 In addition, the gain is not considered an add back for alternative minimum tax purposes.

 The excluded gain is limited to the greater of:  (i) 10 times the taxpayer’s aggregate adjusted basis in the stock that is sold, or (ii) $10 million reduced by eligible gains taken into account in prior tax years for dispositions of stock issued by the corporation. Numerous conditions apply including that the shareholder must own the stock for more than five years.

 It is unclear whether this valuable tax exclusion will be extended. As such, qualified small business issuers, their investors and employees should consider whether the current exclusion warrants taking action by year-end.

 Qualified Small Business Stock must meet certain requirements including:

 1. It must be issued by a corporation that at the date of issuance is a small business corporation (a domestic C corporation with cash and other assets totaling $50 million or less, based on adjusted basis, at all times from August 10, 1993 to immediately after the stock is issued).

 2. The shareholder acquires the stock by original issue in exchange for money or other property or as compensation .

 3. It is issued by a C corporation that meets an active business requirement..

 Certain corporations owing real property assets may not qualify and anti evasion rules apply to corporations that have engaged in certain stock repurchase or purchase transactions.

 Actions Prior To Year-End

 Assuming that the exclusion is not extended beyond year-end, investors, shareholders and/or employees should consider certain actions prior to year end to preserve this valuable tax benefit:

 1. Small business owners contemplating an equity investment in early 2012 may want to complete such investment in 2011.

 2. Small business owners should consider operating as a C corporation rather than as an S corporation or partnership.

 3. Holders of convertible debt and exercisable options and warrants issued by a qualifying small business should consider whether this exclusion offers a reason to convert or exercise prior to year-end.

 4. Employees owning restricted stock awards made in 2011 combined with a timely 83(b) election may allow the restricted stock holder to potentially take advantage of the current exclusion.

 While most PV solar installers and energy services companies have a good working knowledge of the basic financial models for the installation of their equipment, they often don’t have the expertise to uncover the full financial benefits of the installation based on the prospect’s corporate structure and tax position. In addition, some property owners may be wary of financial models coming from the same company that is selling them the equipment and installation. 

 The Rodman & Rodman “Green Team” is a specialty CPA practice that provides business and property owners with independent return on investment (ROI) analysis on new PV solar installations and other energy efficiency projects. We provide a full and independent evaluation of all federal, state and local tax incentives, renewable energy credits, financing options, and depreciation schedules, combined with the company’s unique position to project the true cost or income over the lifecycle of the equipment.

We would welcome the opportunity to work with property owners or energy-efficiency equipment suppliers such as PV solar installers, to provide an independent ROI analysis that can help verify the cost savings over the lifecycle of the installation.

Please email thomas@rodmancpa.com or give me a call at 617-965-5959 to discuss further.

Regardless of what Congress does late this year or early the next, there are solid tax savings to be realized by taking advantage of 2011 tax breaks that may be gone next year. Here are some things to consider: 

Individual Year End Planning

• Pay state taxes due prior to the end of the year;
• Harvest capital losses to cover capital gains;
• Sell capital assets with built in gain to offset capital loss carry forwards;
• Accelerate or postpone income;
• Accelerate or postpone deductions. 

Business Year End Tax Planning

• Invest in capital equipment in 2011 to take advantage of enhanced depreciation deductions;
• Accelerate or postpone income and/or deductions;
• Review your retirement plan for enhancements or additional contributions, if feasible;
• Take advantage of targeted business credits;
• Review tax basis for ability to deduct 2011 losses.

If you haven’t seen our online tax guide, be sure to check it out at: http://www.taxguideonline.com/rodmancpa/.  

 This information was provided by Thomas Astore, CPA and Robert Leonard, CPA.

 
The credit will allow for 30% of the cost of the eligible property to be taken as a credit against income tax. Eligible property is tangible property that is an integral part of the facility and that “originates with the taxpayer”; or, in other words is new property. Also, the credit will be limited by the amount of Section 179 depreciation deduction taken on the eligible property. 

 
The IRS rules state that solar property eligible for this credit “encompasses property associated with the generation of electricity, including storage devices, power conditioning equipment, transfer equipment, and parts relating to the functioning of that equipment”. The IRS makes a distinction between this type of property, and property “used to transmit or use the electricity generated”. In other words, only the actual solar panels and related components qualify, not the transmission lines or any equipment that runs off of the electricity generated. The code also states that structural components also would not qualify for the credit, saying that any part of the property that could be considered a “roof” or other structural component was not eligible for the credit. 

 
In a recent private letter ruling, a distinction was made between a solar panel and a “roof”. By definition, since the solar panel is on top of the building and is covering it it could then be considered a “roof” structure and not eligible for the credit. The private letter ruling determined that the solar panel’s main function was to generate power and that it was created and placed in that space for that function. This characteristic outweighs the characteristic of it being a “roof”. This is good news for taxpayers looking to install solar panels on the top of their building. 

 
Like the PTC, this credit will also flow through a pass-through entity, and can be carried back one year and forward 20 years.
 

This credit was the basis for the 1603 program, which allowed tax payers to take the 30% credit as a cash grant instead of a tax credit. While the ability to receive the cash grant will no longer be available after the end of this year, the 30% tax credit is still valuable. Companies looking to attract investors can design their ownership structure to pass the credits out to investors, who will be willing to invest cash in return. If your company is looking to structure in a way to take advantage of tax credits, Rodman & Rodman can help!

The system we most frequently suggest to clients is having the company’s bank statement sent to the business owner’s personal residence. The bank statement should be opened and reviewed by the business owner to make sure nothing looks out of the ordinary. At that point, the bank statement could be given to the finance staff to reconcile the accounting records. The key to any good control system is simplicity and this seems to be the most simple, and the most effective.

Aside from this, frequent reviews of the accounting records by yourself, or your CPA, or a manager in your office will dramatically reduce the opportunities to commit fraud.

For more information on the above topics or to learn more about Rodman and Rodman’s tax advisory and financial/accounting services, contact Bob Leonard at bob@rodmancpa.com or call 617-965-5959.  

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