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IRS Section 179D: Energy Efficiency Tax Deduction for Commercial Property Owners

Published on by Scott Cress in Construction, Firm News, Tax Services

IRS Section 179D: Energy Efficiency Tax Deduction for Commercial Property Owners

In 2013, energy efficiency tax planning has a special urgency. That’s because the current Section 179D tax provisions are scheduled to expire on December 31, 2013. A proposal to extend EPAct for three years, through December 31, 2016, and to expand the beneficiary categories, has been introduced in the Senate.  Section 179D allows for a deduction to a taxpayer who owns, or is a lessee of, a commercial building and installs upgrades to their building’s interior lighting systems, heating, cooling, ventilation or hot water systems.  This deduction provides a one-time accelerated depreciation; the benefit, which is vastly misunderstood and underused, is that it provides a significant reduction in taxes for those who have retrofitted their buildings with energy efficient upgrades.

Section 179D: Untold BenefitsCost Segregation Studies

Section 179D allows up to $1.80 per square foot in deductions; you can take this deduction if you are:

  • An owner of energy efficient commercial or multifamily properties built or retrofitted since December 31, 2005.
  • An architect, engineer, ESCO, or designer of energy efficient municipal building projects (LEED certified buildings easily qualify).
  • To qualify for the 179D tax deduction, the IRS requires an independent, third party energy tax study–a service in which Barnes Dennig is well versed!

The Barnes Dennig Advantage

The professionals at Barnes Dennig can help you devise an energy efficiency tax planning strategy that accommodates your business needs, while taking into account government decision making. Decrease your tax liability with a 179D certification for your responsible, energy efficient property–contact us today!


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