Green Energy Incentives
Sections §45L & §179D
§45L & §179D
Section §45L is an Energy Efficient Home Credit that gives developers a credit toward the costs of building energy-efficient single & multifamily properties. This dollar-for-dollar credit offsets taxes owed in the tax year in which the property is leased or sold.
Section §179D is a tax deduction that provides building owners, architects, contractors, and designers a deduction for the installation of systems that reduce the total energy and power costs by 50% in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2007.
§45L
Tax Credit for
Residential Properties
Cost Segregation study is one of the most effective ways to reduce tax liability and increase cash flow. Without a Cost Segregation study, your building is a single line asset that drip feeds you a depreciation expense at 2.56% (3.36% for apartments) of the building cost per year. But with a Cost Segregation study you can depreciate, on average, 32% of your building within the first year of ownership.
§179D
Tax Deduction for
Commercial Properties
This tax deduction is an incentive for building owners, architects, contractors, and designers to implement energy efficiency into their properties. The benefit can range between $0.60 and $5 per square foot depending on when the energy efficient improvements were placed in service and the percent of energy savings created from said improvements.