Executives should be aware of some key stipulations if and when they do buy/sell such tax credits:
1
A seller may sell portions of the credit to multiple buyers, but credits may be sold only one time.
2
Proceeds from the sale of credits are not treated as taxable gross income to the seller, nor are payments for credits deductible for the buyer.
3
Purchased credits are subject to passive activity rules, effectively limiting the TTC buyer market to businesses rather than individuals.
4
Buyers purchase TTCs at a discount to profit from the transaction. Top-tier sellers (strong corporates or high-quality projects) are reported to be receiving as much as 90+ cents for each dollar of TTC sold, with some projecting higher prices for attractive tax credits.