Energy-Efficient Commercial Building Property Deduction
A corporation can claim a deduction for costs associated with energy-efficient commercial building property, placed in service after December 31, 2005, and before January 1, 2008. In order to qualify for the deduction:
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The costs must be associated with depreciable or amortizable property in a Standard 90.1-2001 domestic building;
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The property must be either a part of the interior lighting system, the heating, cooling, ventilation and hot water system, or the building envelope (defined in section 179D(c)(1)(C) of the Internal Revenue Code); and
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The property must be installed as part of a plan to reduce the total annual energy and power costs of the building by 50%.
The deduction is limited to $1.80 per square foot of the building less the total amount of deductions taken for this property in prior tax years. The corporation must reduce the basis of any property by any deduction taken. The deduction is subject to recapture if the corporation fails to fully implement an energy savings plan.
For more information see section 179D of the Internal Revenue Code.
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