The U.S. tax code includes substantial tax incentives in the form of tax credits to promote new alternative energy projects. In December 2015 these tax credits were extended for several years. A good portion of the return on investment from these projects originates from these tax benefits, often with nominal investment risk. However, the complex financing structures and accounting for the tax credits often poses financial reporting challenges. To provide a better understanding of the complex nature of the financial reporting, here is a complrehensive look at some commonly found types of alternative energy projects and their financing and investment structures, along with the accounting for them by investors.
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