Under the Cap and Trade Program, carbon credits are created when taxpayers undertake projects whose primary objective is to reduce, avoid, or sequester greenhouse gas emissions. Because a market for carbon credits already exists, the threshold issue to address is what tax consequences flow from the generation of the carbon credits themselves. Charles H. Egerton and Christine L. Weingart, in the Journal of Passthrough Entities, consider these consequences.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products