Extract to table

The key requirements of the safe harbor, each of which is analyzed below in the context of the Solaris West/Veltara Basin transaction, are as follows: (1) the arrangement must constitute a bona fide partnership; (2) the tax-equity investor must make a minimum unconditional equity investment; (3) the tax-equity investor must have a reasonably anticipated pre-tax profit; (4) the structure must not include impermissible put or call options; (5) the tax-equity investor must retain a minimum residual interest after the flip; and (6) the allocations must have substantial economic effect under Section 704(b) of the Code and the Treasury Regulations thereunder

2007-65 safe harbor is that the arrangement must constitute a bona fide partnership for federal income tax purposes

704-1(b)(2), an allocation has economic effect if, and only if, throughout the full term of the partnership, the allocation is consistent with the members' underlying economic arrangement — that is, the member to whom an item is allocated must bear the economic benefit or burden of that item

Section 50(a) Recapture Rules — Overview Under Section 50(a)(1) of the Code, if "Section 38 property" — which includes property generating the Investment Tax Credit under Section 48 — ceases to be "investment credit property" before the close of the "recapture period," the taxpayer must recapture a proportionate share of the ITC that was previously claimed

The notice must be delivered promptly upon the managing member becoming aware that a Change of Control is proposed or is reasonably anticipated to occur

05 of the Partnership Agreement provides that the prior written consent of the Tax-Equity Investor must be obtained before any Change of Control is "consummated