CCA 201032038: Solar-energy equipment generally receives five-year MACRS treatment, with limits on pool-heating property

Number

201032038

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Classification of Property and Additional First Year Depreciation

Topics

Income and deductions

Code sections

§ 48, § 168

Ruling dated

July 1, 2010

Publicly released

August 13, 2010

Source

View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.

About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.

View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice addresses the recovery period for solar-energy equipment and the status of bonus depreciation. It states that qualifying equipment using solar energy to generate electricity, heat or cool a structure, provide hot water, or provide solar process heat generally falls within the five-year MACRS classification, but equipment used to heat a swimming pool does not. It also notes that the 50-percent additional first-year depreciation deduction had expired for most property placed in service after 2009, while proposed legislation would have extended it if enacted.

Ruling snapshot

Question: How should qualifying solar-energy equipment be classified for depreciation, and had bonus depreciation been extended?
Outcome: Advice given
Key authorities: IRC §§ 48(a)(3)(A) and 168; section 2022 of the proposed Small Business Jobs Act of 2010.

Full text (IRS public release)

ID: CCA_2010070115383557 Number: 201032038
Release Date: 8/13/2010
Office: ------------
UILC: 168.20-00, 168.36-00

From: ------------------
Sent: Thursday, July 01, 2010 3:38:41 PM
To: ----------------------
Cc:
Subject: RE: Green Team Org-MACRS 50%

-----------

The 5-year property classification under section 168 (MACRS) includes
equipment using solar energy that meets the definition of "energy property" in section 48(a)(3)(A). Generally, equipment that uses solar energy to (i) generate electricity, (ii) heat or cool a structure, (iii) provide hot water for use in a structure, or (iv) provide solar process heat, qualifies for the 5-year classification. But, this 5-year classification does not include property used to generate energy for the purposes of heating a swimming pool.
The 50-percent additional first year depreciation deduction (bonus depreciation)
expired for most property placed in service after 2009. However, yesterday [June 30, 2010], several U.S. senators introduced the Small Business Jobs Act of 2010 and section 2022 of that Act would extend bonus depreciation for one more year. If this legislation is approved, this extension would apply to property placed in service after December 31, 2009, in taxable years beginning after that date. This legislation has not yet been approved by the Senate.
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