Anyone know if the plan can invest

[jkharvey]

The client wants to get money ASAP to invst in a solar system that will be installed on his personal farm property. The solar panels will NOT provide any electricty that is used by him personally. The electricity is only sold back tot he power company. Anyone do this? Is it an ok investment or are there PT issues?

[Belgarath]

I don't know how close this solar farm is to water, but there is a definite odor of fish in the air.

I'm not going to say it is impossible. But a very complete analysis of all the details would be required. Hard to imagine that somehow, some way, this is not going to provide a benefit of some sort for him, or family members, or another party in interest/disqualified person.

If in fact it passes on all aspects as not being a PT, then you would still have all normal fiduciary issues to consider.

[Guest BED]

See Rollins v Commissioner, 2004-260, to see how far the Service will take the PT issue.

[masteff]

on his personal farm property.

So how does the plan arrange to build a plan asset on his property w/out entering into some form of agreement w/ him? And do so in a proper arms length manner w/out it being a PT?

[shERPA]

Likely a PT issue as it could be considered an improvement to a disqualified person's personal property.

Also, most solar deals I've seen only pencil out when various state and federal tax credits are included. The plan is not a tax paying entity, so it would likely not benefit from these subsidies. Does it still pencil out as a viable investment? Or is the client mistakenly expecting to personally benefit from any tax subsidies (in which case this is yet another item making it a PT)?

[ESOP Guy]

Don't forget this could end up paying Unrelated Business Income Tax (UBIT).