Leveraging the tax credit under 26 U.S.C. 25C - Nonbusiness Energy Property, if you spent $500 on a home energy audit that recommended weather stripping your exterior doors among others recommendations and all you do is go to Home Depot and spend $40 on weather stripping for your exterior doors. Have you now expended $540 on “residential energy property expenditures” for the purposes of the credit and thus now qualify for the tax credit?
The applicability of 26 USC 25C to situations like the one you describe is still to be determined. The credit includes "labor costs" including "preparation" but exactly what that means and whether or not it applies to a home energy audit coupled with a $40 "installation" remains to be seen. It seems to be in the range of reasonable. Whether or not you choose to include the credit would have to be your decision.
Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.
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