What does 60 cents on the dollar mean?

In the illustration, every $1 put into the equipment removes about $1.67 of federal tax, so each dollar of tax costs about 60 cents of equipment you then own. That is how the structure is built, not a promised result. Your own figures depend on your bracket, your other income and what your CPA confirms.

Does it reach gains from past years?

Yes. The credit offsets this year’s federal tax first and carries back to the three prior tax years under §39(a)(4), so a gain reported in any of the last three years can still be reached. Your CPA files the refund claims; the checks typically land within weeks, settled well within about 90 days in most cases, and past 45 days the IRS pays you interest on what it owes (IRC §6611).

Does it cover active income as well as passive?

Both can be reached. Tax on passive income, including gains from rental real estate, is offset by default under §469. Tax on W-2, business or professional income requires material participation, which your CPA confirms and documents. The 3.8% net investment income tax and state income tax sit outside the credit.

What stands behind the position?

Independent CPAs and tax counsel have reviewed the structure, and tax opinion letters address the credit, the depreciation and the participation treatment. A documented position for your CPA to review, not a guarantee of an outcome. Every term and every risk is in writing before you commit.

Capital gains · Real estate investors and large gains

Can you lower the tax on a large capital gain without a 1031 exchange?

Yes. Keep the proceeds. The federal tax on the gain is offset by a credit and a write-off from equipment you own, this year and the three before it.

What a dollar of capital gains tax costs to offset

$0.60

What’s in this number

In the illustration, 39% down on solar equipment earns a 40% federal investment credit plus a first-year write-off, so about $1.67 of federal tax is no longer owed per $1 in: roughly 60 cents of equipment per dollar of tax. It offsets this year’s federal tax first, then reaches back three years under §39(a)(4). How the strategy is structured, not a promised result. Your CPA confirms the figures and files.

Informational only. Longtable coordinates licensed tax attorneys and CPAs and does not give tax advice. Confirm with your own CPA or tax advisor before acting.

Speak With a Specialist Compare it to a 1031

What it does

Works on real estate exits, business sales, equity compensation and other liquidity events.
Reaches back three tax years, so a gain already on a past return is still in play.
Offsets tax on passive income by default and on active income with your CPA’s confirmation.

How is this different from a 1031 exchange?

A 1031 exchange defers the tax on a real estate gain and requires the proceeds to be reinvested in like-kind property. Longtable’s capital gains tax strategy offsets the federal tax itself with the federal solar investment tax credit and a first-year write-off from equipment you own, about 60 cents of equipment per dollar of tax in the illustration, reaching back three tax years, and it works on business sales, equity compensation and passive income as well as real estate. Your own CPA confirms the position and files.

The comparison

A 1031 defers the tax. This offsets it.

A 1031 pushes the tax to a later sale and locks the proceeds into like-kind real estate. This leaves the proceeds in your hands and takes the federal tax off the return.

Point of comparison	1031 exchange	Capital gains tax strategy
The tax on the gain	Deferred to a later sale	Offset by a federal credit and a first-year write-off
The proceeds	Reinvested in like-kind real estate: 45 days to identify, 180 to close	Yours to keep; equipment sized to the tax instead
What it covers	Real property held for business or investment	Real estate exits, business sales, equity compensation, other liquidity events
Prior years	No	Reaches back three tax years (§39(a)(4))
Active and passive income	Real property gains only	Both, as your CPA confirms under §469
Cost per dollar of tax	Nothing now; the full tax at the later sale	About $0.60 of equipment you own, in the illustration

Source. IRC §1031 (real property; 45-day identification and 180-day exchange periods). Longtable engine: 40% federal investment credit, 39% down, a first-year write-off on 80% of the equipment’s cost; §39(a)(4) carryback. Illustrative example. Confirm with your CPA.

How it works

From the gain to tax you no longer owe.

Size it to the gain.
A 30-minute call with the sale, the year it closed or will close and your federal tax picture. Your CPA welcome; nothing to buy or sign.
Your CPA reviews it.
The position, the equipment contract, the tax opinion letters and the written risks go to your CPA before anything moves.
Own the equipment. Offset the tax.
39% down makes you the owner. Your CPA files the credit and the write-off against this year’s federal tax, then the three prior years. This year’s refund typically arrives in about 2 to 4 weeks; prior-year checks typically well within about 90 days.

Speak With a Specialist Or call 248.742.0065

More information

For your CPA. The §48 investment credit at 40% of the position (30% base plus the 10% domestic-content adder) plus first-year depreciation on 80% of the equipment, against a 39% wire. Depreciation offsets this year’s tax first, the credit fills what is left, and the remainder carries back to the federal tax of the three prior years under §39(a)(4). The credit offsets regular federal income tax, including the tax on a long-term gain; the 3.8% net investment income tax and state income tax sit outside it. Losses above the §461(l) limit carry forward. The full engine, with your own numbers, is on the solar tax credit page.

Passive and active. Gains from rental real estate are passive income under §469, and the credit from leased equipment offsets tax on passive income by default. To reach tax on W-2, business or professional income, your CPA confirms material participation and documents it each year.

Against a 1031. A 1031 exchange defers the tax and keeps the proceeds in like-kind real property, with 45 days to identify and 180 to close. This offsets the federal tax and leaves the proceeds free. Where a 1031 still fits part of a sale, your CPA sets the mix.

The risks, plainly. You would only ever owe what is left on the equipment loan if the two institutional companies that operate your system and buy its power both failed and folded on the loan first. Sell inside five years and part of the credit is recaptured. The credit reaches back only three years, so each year paid in full eventually falls out of reach. Tax law can change. Every term is in writing, and your CPA signs off before anything moves.

Is it a fit?

Built for.

A large capital gain this year or in the last three: a property, a business, equity compensation.
Federal tax of $200,000 or more in a year, or a gain that puts you there.
You can pay or finance roughly 39% of the equipment up front.

You want to defer the tax and stay in like-kind real estate; a 1031 may fit better.
Your CPA will not review a tax credit plan.

Straight answers

Questions, answered.

Is this a 1031 exchange?: No. A 1031 exchange defers the tax on a real estate gain and requires the proceeds to be reinvested in like-kind real property, 45 days to identify and 180 to close. This offsets the federal tax itself with a credit and a write-off from equipment you own, and the proceeds stay yours. Your CPA decides which fits, or whether both do.
What does 60 cents on the dollar mean?: In the illustration, every $1 put into the equipment removes about $1.67 of federal tax, so each dollar of tax costs about 60 cents of equipment you then own. That is how the structure is built, not a promised result. Your own figures depend on your bracket, your other income and what your CPA confirms.
Does it reach gains from past years?: Yes. The credit offsets this year’s federal tax first and carries back to the three prior tax years under §39(a)(4), so a gain reported in any of the last three years can still be reached. Your CPA files the refund claims; the checks typically land within weeks, settled well within about 90 days in most cases, and past 45 days the IRS pays you interest on what it owes (IRC §6611).
Does it cover active income as well as passive?: Both can be reached. Tax on passive income, including gains from rental real estate, is offset by default under §469. Tax on W-2, business or professional income requires material participation, which your CPA confirms and documents. The 3.8% net investment income tax and state income tax sit outside the credit.
What stands behind the position?: Independent CPAs and tax counsel have reviewed the structure, and tax opinion letters address the credit, the depreciation and the participation treatment. A documented position for your CPA to review, not a guarantee of an outcome. Every term and every risk is in writing before you commit.

Schedule a Meeting

Before the gain hits your return.

Thirty minutes. Your CPA in the loop.

Or call 248.742.0065Mon – Fri: 9:00 AM – 5:00 PM