Clean Energy Tax Credit Transferability Services
Looking to buy or sell renewable energy tax credits? Baker Tilly’s renewable energy tax credit syndication practice is designed to provide you with efficient access to the transferable energy tax credit sale and transfer marketplace.
Clean Energy Tax Credit Transferability Services
The Inflation Reduction Act (IRA) introduced the concept of “transferability” — allowing a one-time transfer of a credit, essentially a tax rebate, from seller to buyer. Tax credit buyers are typically either C-corporations or individuals, trusts or family offices with passive income and an expected tax liability, looking to purchase single year tax credits to lower their tax liability.
Benefits of purchasing
No project involvement
Buyers can acquire the credit without being an owner in a clean energy development project.
Same-year usage
Buyers can target their capital directly for the tax year(s) in which they have tax liability to offset, eliminating the need to project for future tax years.
Tax-exempt
The discount between credit value and purchase price is not subject to tax for the buyer.
Offset quarterly tax payments
Buyers can use credits against quarterly estimated income tax payments.
Carryback or carryforward
Buyers can generally use credits via a three-year carryback or 22-year carryforward.
Environmental impact
Buyers can enhance their social and environmental impact and economic development through renewable energy made possible through the tax credit acquisition.
Benefits of selling
Efficient source of capital
This capital can be used to repay or reduce debt and can be used as a source of capital for your next project or for other capital needs for your company.
No project involvement
The tax equity investor does not need to be involved in your clean energy project, making it an attractive investment opportunity.
Cash flow
Sellers of tax credits can retain project cash flow and other tax attributes (such as depreciation). The proceeds received on sale are not subject to federal income tax.
Tax credit brokerage
Baker Tilly, through its FINRA-registered broker dealer, Baker Tilly Capital, LLC, provides comprehensive services related to monetizing federal renewable energy credits, including:
- Developing and implementing strategy and approach to market tax credits to potential investors
- Identifying potential investors, including current and prospective Baker Tilly Capital, LLC investor clients
- Assisting, when applicable, with obtaining tax credit insurance for projects
- Preparing pitch pieces and marketing materials for investment opportunity
- Establishing data rooms and diligence documentation to create efficient underwriting for potential investors
- Assisting in obtaining unique project identification number from the IRS and filing appropriate documentation related to the transfer of credits
- Working with client and legal teams on negotiating documents and closing of transactions
Baker Tilly Capital, LLC, a registered broker-dealer, Member FINRA and SIPC, is controlled by Baker Tilly Advisory Group, LP
BT Renewable Tax Credit Fund
Our fund is designed to provide you with efficient access to the Investment Tax Credit (ITC) and Production Tax Credit (PTC) sale and transfer marketplace to help minimize your tax liability, with strong risk-adjusted returns while supporting or elevating your environmental, social and governance (ESG) and sustainability initiatives.
Why Baker Tilly?
Baker Tilly has been a first mover and leader in providing a best-in-class process used to verify the value of a project’s ITCs and PTCs available through the IRA. This same industry-leading platform is used to underwrite and mitigate against tax credit recapture risks with the fund’s investments.
- Efficient closing process. Transaction diligence and underwriting performed leveraging Baker Tilly’s industry-leading cost segregation and tax credit substantiation services.
- Consistent transaction execution. Multiyear commitments available.
- Competitive pricing and structures. Optimize both the amount and timing of your energy tax credit monetization efforts.
- Compliance and fund management. Performed by our real estate advisory team.
Baker Tilly has extensive expertise in the syndication of federal tax credits, including:
- Transaction diligence and underwriting performed using the same process and memos developed for ITC/PTC substantiation.
- Compliance, fund management and investor relations performed by our real estate advisory team, which also monitors tax credit recapture compliance for New Markets Tax Credits.
About BT REI Manager, LLC
BT REI Manager, LLC (BT REI) is a subsidiary of Baker Tilly Advisory Group, LP (Baker Tilly), and part of the Baker Tilly real estate advisory group. Baker Tilly is a top 10 advisory and tax firm in the U.S.
Within Baker Tilly, real estate advisory is the largest industry group where our team specializes in real estate acquisition, development, management and disposition. BT REI is led by the same experienced real estate finance specialists who advise the real estate clients of Baker Tilly. They have significant experience assisting clients with investment structuring, diligence, capital raising, identifying cost-effective alternative sources of financing, securing tax credit and incentivized financing, and creating and executing real estate acquisition and disposition strategies. They distribute Regulation D private placements through independent broker-dealers, registered investment advisers and family offices.
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