Federal Energy Tax Certification
(EPAct 2005)

Save Energy..... Save Taxes ...... Increase Cash Flow & ROI

The Federal Government now allows up to $1.80 per sq. ft. in tax benefits for commercial properties. The energy tax benefits are available for energy efficient buildings components (lighting, HVAC and building envelope) placed into service after January 1, 2006.

If your company owns or leases commercial buildings - which includes most types of buildings, including residential buildings with four or more stories above grade - and you have installed or retrofitted the property to be more energy efficient, you may be eligible for a deduction for part or all of the costs associated with the installation or retrofit. This opportunity allows for the potential immediate expensing of costs that would otherwise be capitalized and recovered through depreciation over 27.5 or 39 years depending on if it was a residential investment or commercial property. Components of the “Cost” that can be written off, includes anything that can be capitalized, including labor.

Systems Include:

1. Interior lighting system;
2. Heating, cooling, ventilation, and hot water systems; and
3. Building envelope.

Benefits:

• Up to $ 1.80/sq.ft. tax deductions to you
• Tax deductions are an accelerated depreciation of capital assets (39 years accelerated to 1 year)
• Ability to go back to Jan. 1, 2006
• Huge Tax Deductions from Abandoned Property and Cost Segregation Studies
• The person or organization that pays for construction is generally the recipient of the deduction. This is usually the building owner, but for some HVAC or lighting efficiency projects, it could be the tenant.
• It is a fact that commercial "green" buildings outperform similar buildings that are not “green” in the area of: occupancy rates, sale price and rental rates.
• Significant Utility Bill Savings
• Pay Less Tax. Save More Money.

Learn the Impact of EPAct on Your Bottom Line

What It's Worth to my Wallet?*

*(this does not take into account the massive tax deductions created from the abandoned property and cost segregation studies)

Commercial/Investment Building Owners

At Engineered Tax Services, we know how to optimize the tax law to make building or retro-fitting energy efficient system investments less of a financial burden as well as more profitable and tax efficient. Being an accounting based engineering firm, we are in more of a position to help our clients achieve the maximum federal tax incentives and deductions that are aimed at making energy efficient investment as economically viable as possible. We also coordinate the associated Abandonment Studies and Cost Segregation Studies to fully take advantage of the IRS allowable tax deductions.

For commercial building owners doing energy efficient retro-fits with the associated Abandonment and Cost Segregation Studies, these one-year deductions (energy efficient systems) are in addition to the abandoned property and cost segregation deductions. Typically the items deducted under §179D would be 39-year assets and not reallocated to a 5 or 15-year life. Owners who are not appropriately writing these off are leaving large amounts of money on the table and paying excessive tax

Timing is everything here, as the Abandonment and Cost Segregation Study must be done before the energy retrofit is started in order to property identify and value those items that may be replaced as part of an energy retrofit in the future. The IRS takes the position that a pile of rubble is worth nothing. Therefore, once the old property is removed, it has a value of zero.

Free Feasibility Study for Abandonment Property

Government-Owned Buildings

For government-owned energy-efficient commercial buildings, such as public schools, prisons, libraries, etc., the IRS has stated the deduction to be allocated to the person” primarily responsible” for designing the property in lieu of the public entity.

Calculate My Deduction for Government Building