Extract to table

Section 50(c) — Basis Reduction Section 50(c)(1) of the Code provides that the basis of any property for which an ITC is determined under Section 46 shall be reduced by 50% of the amount of the credit determined

However, Ridgeline's consent rights under the LLCA must be addressed

The LLCA must clearly specify which credits are subject to the Section 6418 election and which are allocated to the members

Both the eligible taxpayer (Solstice Holdings) and the transferee taxpayer (Pinehurst) must complete a registration process with the IRS and obtain registration numbers before the election can be made

To protect Ridgeline's interest, we recommend that the LLCA include the following covenants and representations: (a) Cap on Section 6418 Election: A covenant from CBR Manager that the Section 6418 transfer election for the 2023 taxable year shall not exceed $64,800,000 in aggregate ITCs without Ridgeline's prior written consent

(b) Minimum Credit Allocation: A representation from CBR Manager that, after giving effect to the Section 6418 election, the ITCs available for allocation to the partners under Sections 46(d) and 704(b) shall not be less than $89,040,000