Energy & Clean Technology Alert: Court: Tax Equity Partnerships Promote Congressional Intent
1/31/2011
Tax credit investors received a big boost from the U.S. Tax Court in Historic Boardwalk Hall LLC v. Commissioner, 136 TC No. 1 (January 3, 2011). The court upheld a partnership structured to generate historic rehabilitation tax credits for a corporate investor notwithstanding the investor’s limited risks and clear tax motivation. Where Congress enacts tax credits consciously to spur investment in unprofitable project areas, taxpayers act appropriately in pursuing transactions that make business sense only on an after-tax basis. The case has positive implications for renewable energy sector investors looking to avail themselves of production tax credits, investment tax credits, accelerated depreciation deductions, and other tax incentives.
