Monetizing Any Tax Credit for Any Technology or Industry

Tax credit for the new glass coated lithium battery.

 

90% tax credit.

 

Investor provides funding.

 

The tax credit is used to buy shs in a REIT.

 

The REIT throws off cash.

 

The investor gets the cash.

 

The tax revenue  >  tax credit

 

90% ITC ROI Calculation

 

Investment:                   $100 into battery tech. SM owns shs.

Tax credit:                         90  

Deprec:                               5

Net invested        5

REIT 5% dividend:              5

 

ROI on $5           100%

 

Tax Revenue

REIT MPC               Output Multiplier = 1 / (1 – .8)-( .2) = 1/.4 = 2.5

 

With no Tax Rev = Output multiplier  5.0 =   $500 x .2 = $100

With Tax Rev     =  Output multiplier 2.5 =    $250 x .2 = $50

 

Tax Rev = $50

Tax Rev from ROI =  $5 x .2 =$1.00

 

$1.00 x 40 yrs = $40

 

30% ITC ROI Calculation

Investment:                   $100 into battery tech. SM owns shs.

Tax credit:                         30  

Deprec:                               5

Net invested      65

REIT 5% dividend:              $5 based on $100k invested

 

ROI on $65                7%

 

Tax Revenue

REIT MPC               Output Multiplier = 1 / (1 – .8) – ( .2) = 1/.4 = 2.5

 

With no Tax Rev = Output multiplier  5.0 =   $500 x .2 = $100

With Tax Rev     =  Output multiplier 2.5 =    $250 x .2 = $50

 

Tax Rev =                                $50

Tax credit cost =                        30

Net =                                         20

 

Tax Rev from ROI =  $4.55 x .2 = $.91

 

$1.00 x 40 yrs = $36.40

 

Calculation with material costs

 

Multiplier with tax payment and minus material costs = 1.25

1.25 x $100,000

$125,000  x .2 = $25  

 

Tax revenue per annum on REIT dividend

Dividend income = $100,000 x .05 = $5,000

$5,000 x .2 = $1000 tax revenue   

 

Tax revenue is ongoing.

In 5 yrs, 30% tax credit is paid up.

In 65 yrs, 90% tax credit is paid up.

 

Add charitable gift to eqn:

50% tax benefit x tax rate = 10% tax benefit

 

30% tax credit is net positive tax revenue as of yr 1.

35% tax credit paid off in Yr 1.

40% tax credit paid off in Yr 5.

50% tax credit is paid off in 15 yrs.

90% tax credit is paid off in 55 yrs.

 

If 30%Then no tax for 20 years

If 35% Then no tax for 15 years

If 40% Then no tax for 10 years

If 50% Then no tax for 5 years

If 90% then Pay pay pay

 

Energy Storage

Money from REIT investment ….

 

Wrong?

With no tax rev =  tax credit = $25 tax revenue

With tax revenue = tax credit – tax revenue = $15 tax revenue