Tax Credit
Size
Purchase Price (cents/dollar)†
Tax Credit
Profile
† Purchase price is buyer's discount on the tax credits. Transaction costs, insurance, and other diligence fees are normally paid by the seller, therefore reducing net proceeds.
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1 The IRS confirmed in its June 2023 guidance on transferability that the savings in taxes (in this case, $10) is not taxable income.
2 In June 2023 guidance on transferability, the IRS stated that a “transferee taxpayer may also take into account a specified credit portion that it has purchased, or intends to purchase, when calculating its estimated tax payments…” From a cashflow perspective that is valuable to the purchaser. However, many sellers resist significantly delayed payment terms, and therefore will push for higher pricing in these cases.