§48E Transfer Agreement: Key Terms for Credit Buyers

The transfer agreement allocates the risk that a credit is reduced, disallowed or recaptured. This guide lists the terms a buyer should expect in a §48E deal and why each matters. It is a checklist for discussion with your lawyer and CPA, not legal advice.

Terms to expect

Term	What to look for
Credit and price	Credit amount, price per dollar, the tax year, and a price adjustment if the amount changes. Payment must be in cash (§6418; Treas. Reg. §1.6418-1).
Representations	Registration number; placed-in-service date; basis; credit rate and bonuses; wind and solar start and finish dates; foreign-entity status and MACR; no related-party relationship; accuracy of the election statement.
Indemnity	No-fault indemnity for credit loss, including interest and penalties. Crux's data says about 89% of ITC deals include one.
Credit support	Parent guaranty and/or tax credit insurance. Cenet reports premiums of roughly 2% to 5% of the insured limit and coverage often 90% to 140% of the credit; confirm who pays and what the policy excludes (Crux: most foreign-entity risk is not covered).
Recapture covenants	Restrictions on sale or transfer of the project during the five years, lender forbearance, maintenance of insurance, wage compliance; seller notice of any recapture event (93% of ITC deals per Crux).
Audit cooperation	Seller keeps and shares records, helps respond to IRS inquiries, and bears costs.
Conditions to close	Diligence satisfaction, delivery of documents, a change-in-law exit. Crux says change-in-tax-law conditions rose to roughly 55% of deals in H1 2026 from 12% in H1 2024.
Transfer rules	A transferred credit generally cannot be transferred again (§6418(e)(2)); buyer rep that it is not a specified foreign entity.
Excess credit	Who pays the 20% excessive credit transfer penalty if applicable and the process to resolve it (§6418(g)(2)).
Reporting	Seller delivers the registration number, placed-in-service documents and election statement in time for your return (reporting guide).

What to be careful of

• Indemnities from thinly capitalized project companies. Ask for a creditworthy guarantor.
• Caps that are lower than the credit, or a price refund as the only remedy.
• Insurance exclusions for the risks you worry about most (foreign-entity, wind and solar start dates, prevailing wage).
• Payment before you have the registration number and election statement.

Pair this with the CPA checklist, the §48E diligence checklist and the recapture and insurance guide. Start with the §48E buyer guide.

Educational information only, not tax, legal or investment advice, and no outcome is promised. Rules and figures were checked against the cited sources on October 29, 2026; they change, so confirm with your CPA and counsel before acting. Market figures are third-party data and are not Veritas quotes. See our disclaimer.