The IRS has issued guidance that addresses the tax treatment of rebates received for purchasing energy efficient property and improvements. Generally, individuals who receive the rebates aren’t required to include their value as income on their federal tax returns. However, they must reduce the basis of the property by the amount of the rebate when they sell the home. Specifically, Announcement 2024-19 provides that amounts received from the U.S. Dept. of Energy’s Home Energy Rebates programs funded through the Inflation Reduction Act will be treated as a reduction in the purchase price or cost of property for eligible upgrades and projects. Contact us for more information.
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