IRS Issues Guidance on “Beginning of Construction” and Partnership Flips for Carbon Capture Projects

On February 19, 2020, the Internal Revenue Service issued Notice 2020-12 and Revenue Procedure 2020-12, which concern the carbon oxide sequestration credit under section 45Q (the “Section 45Q Credit”) of the Internal Revenue Code.

Notice 2020-12 provides guidance on when construction of a qualified facility that includes carbon capture equipment will have begun for purposes of the Section 45Q Credit. Our analysis concerning Notice 2020-12 is available here.

Revenue Procedure 2020-12 provides guidance on allocations of the Section 45Q Credit in partnership flip transactions. Our analysis concerning Revenue Procedure 2020-12 is available here.

For more information, contact any of the attorneys listed in this advisory.