TaxIncennovations
3730 Kirby Drive, Suite 1200
Houston, Texas 77098
Building Owners
Prior to 2006, building owners received tax benefits through the depreciation of buildings, up to 39 years in age. Building owners that have built or renovated commercial buildings will find themselves eligible to receive a tax deduction based on the energy efficiency of the building, as noted in the Energy Policy Act of 2005.
If the building was constructed or renovated between 2006 and 2017, the 179D tax deduction provides the building owner with immediate deductions for energy efficient designs and can be placed on the current tax return. No amending of returns regardless of when the building was put into service or renovation completed.
Let TaxIncennovations help you get onto the path to valuable 179D energy efficient tax deductions today!
The deductions are based on the square footage of buildings and can be as much as $1.80 per square foot. There are three building systems (listed below) that can be modeled and verified to meet the minimum ASHRAE Standards and each system can yield up to $.60 per square foot.
Building Envelope
HVAC & Hot Water Systems
Lighting Systems
TYPES OF BUILDINGS THAT QUALIFY
A common misconception is that buildings must meet LEED certification to qualify for the deduction. As previously stated, to qualify for the deduction, the building or renovation need only meet the minimum standards as set forth by ASHRAE standards. These building types include the following:
Commercial Buildings – The majority of buildings that qualify will fall under this category. These include office buildings, apartment buildings at least 4 stories, warehouses, industrial facilities, and retail buildings.
Garage Space -These types of buildings include unconditioned, attached, or detached garage spaces that may be part of commercial or residential buildings.
Industrial/Warehouse Buildings – Buildings used for industrial purposes; however, industrial process systems are excluded.
Multi-Family Residential Buildings – These types of buildings include non-commercial buildings that are four stories or more.
We use IRS approved modeling software to calculate the amount of the 179D deduction. In order to certify and seal the report per the IRS guidelines, our licensed professional engineers conduct site inspections and review calculations.
Case Study
We recently conducted a 179D study for a Mechanical Contracting Company headquartered in Houston, Texas that renovated a one story, 30,000 sq. ft. office space and 35,000 sq. ft. industrial space into service in 2014. We evaluated the potential tax benefits of claiming a 179D tax deduction for the energy efficiencies achieved by the building, and ultimately delivered $105,000 in tax deductions to the company by the energy efficiencies obtained by the building.
Let TaxIncennovations evaluate how we can assist you in claiming energy efficient tax deductions.