§6418 — The rail that turned tax credits into cash

The trade

§6418 lets a credit holder transfer eligible credits to an unrelated buyer for cash, exactly once. The transferee gets a refundable credit on their own return; the transferor gets cash; the IRS gets a portal filing.

The rail that makes this work — credit verification, buyer KYC, transfer-election filing, escrow, and cash settlement — is exactly what DeFi rails do well. BV provides that rail with:

• On-chain verification of credit existence and amount via XCT
• Atomic transfer-election booking as part of the trade
• MXD escrow for the cash leg
• U.S. channel: Reg D 506(c) buyer gating via AccreditedRegistry — credit transfers are offered to verified U.S. accredited investors and institutional taxpayers
• Portal-filing handoff as a final off-chain step

Cash release is an election, not plumbing

On a forward sale the buyer's money can fall due long before the credit exists. Where that cash sits in the meantime is a tax position, so it is stated per contract rather than assumed:

• Direct — the purchase price goes to the seller when it is paid. This is how a producer funds production with the buyer's money, and it is the right answer for a non-U.S. seller, or a taxable one content to treat the receipt as advance income under §61.
• Escrowed — the contract holds the cash and releases it only once the credit is determined for the tax year. This is the §6418(b) shape: the seller has not received consideration before the credit exists.

Escrow has exactly two exits and both are date-driven, never declared — nobody decides the seller performed. Either a neutral settlement agent records certification and the cash releases, or the certification deadline passes and 100% of the escrowed purchase price returns to the buyer. The premium is not refunded: it bought optionality the buyer held and used.

Four parties, and none of them is the same party

The escrow only means something because the roles are held by different entities:

The contract enforces the part a contract can: the seller cannot certify its own credit, even if it holds the settlement-agent role. That refusal is on chain, not in a term sheet.

Mechanics

1. List: producer mints XCT-45V (or any other §45/§48 token).
2. Bid: accredited buyer bids on the credit at a discount-to-face.
3. Match: atomic swap of XCT for MXD; transfer election booked on-chain with portal-filing metadata.
4. File: BV submits the IRS portal filing on behalf of both parties.
5. Claim: transferee claims the credit on their next return.

Trust

• Every transfer election cited back to its IRS portal filing reference
• §6418-specific tax counsel sign-off on the workflow
• Marketplace itself accredited-only; non-accredited retail liquidity out of scope at v1