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If you want an energy rebate, act now or wait in line

By HELEN HUNTLEY
Published July 23, 2006

If you've been thinking of cashing in on the new federal tax credits for making your home more energy efficient, you might want to get right on it.

If you're willing to give solar energy a whirl, you have a chance to double dip, collecting a federal tax credit and a state rebate. But it's the early birds who are going to walk away with the state money.

Here's the deal on solar:

To claim the state rebate, you must apply within 90 days of purchase, and that's not the only catch. The Legislature allocated $2.5-million for rebates. Once that money is gone, people who qualify will go on a waiting list for a rebate next year, assuming the Legislature comes through with more money. The program extends through June 30, 2010, but must be funded each year.

The credits and rebates make solar more affordable, but not cheap. Water heaters cost $4,000 to $5,000 installed, while a typical home photovoltaic system costs $25,000 to $35,000 installed, said Jim Rex, sales manager at Solar Source in Largo. Posthurricane, a photovoltaic system that size could power lights and a refrigerator, but not an air conditioner, he said.

Federal tax credits of up to $500 are offered for other types of energy improvements. The credit is 10 percent of the cost of some improvements such as windows (maximum credit $200) and 100 percent of the cost of others, such as tankless water heaters and heat pumps (maximum credit $300).

Before signing a contract, be sure the manufacturer certifies the product qualifies for the credit.

A qualifying window costs about $50 extra, said Pedro Taggart, a St. Petersburg Home Depot associate. "But if you were going to replace windows anyway, the amount of money saved on the electric bill will cover that cost in a couple of years."

More information is available from the Florida Solar Energy Industry Association (www.flaseia.org) and EnergyStar (www.energystar.gov).

I have inherited $1.2-million from a deceased friend overseas. All applicable taxes have been paid in his country. When I bring the money into the United States, will I owe any taxes?

No. The recipient of an inheritance does not owe income tax unless the money is in a tax-deferred vehicle such as a retirement plan, IRA or savings bonds. For investments like those, the beneficiary owes regular income taxes when the money is withdrawn just as the original owner would have.

Greg Rosica, tax partner with Ernst & Young in Tampa, assures me (and you) that the no-tax rule applies even if the inheritance is from a foreign source.

I hope your "deceased friend" is someone you knew rather someone you learned about from an e-mail bearing good news about your inheritance. If the latter is the case, hang onto your day job and your bank account information.

Don't become a phishing victim

We all should know that many scam artists view the Internet as the path to riches, but people continue to be fooled by fraudulent e-mails. I regularly see phony e-mails that look like they came from the IRS, the SEC, the FDIC, eBay, PayPal, Visa, MasterCard and countless banks and credit unions.

Keep in mind that government agencies, financial institutions and other legitimate companies do not send e-mails asking people to supply their account numbers, passwords or other personal information.

The IRS will not notify you by e-mail about a refund. If you get an e-mail that asks you to a click on a link and enter some information, just don't do it!

Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, go to www.sptimes.com/blogs/money or write Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.

[Last modified July 23, 2006, 06:24:48]