American Bar Association Tax Section Midyear Meeting - Private Funds Forum

The Inflation Reduction Act of 2022 (P.L. 117-169) (IRA) included an unprecedented number of tax credits and other incentives intended to encourage clean energy generation, carbon recapture, clear fuel production, and domestic manufacturing of components of clean energy machinery, equipment and minerals. The IRA also added IRC Section 6418 which allows eligible taxpayers (including partnerships) to transfer to unrelated parties all or a portion of certain eligible credits in exchange of cash which is excluded from the transferor's gross income and IRC Section 6417 which allows certain tax-exempt entities, state and local governments and various other type entities to elect to receive direct cash payments from the government in lieu of certain tax credits. This panel will present a primer of what every private fund tax practitioner should know about the tax credit, cost allowance, direct pay and credit transferability provisions of the Inflation Reduction Act of 2022.