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Tax Credits
They sound nice, but real estate investors may think that they are not so easy to come by. Those investors who do happen upon them find usually find themselves bogged down by the IRS’ strict stipulations surrounding them.
Tax credits are, in fact, tools set in place to help investors grow their portfolios and while they may seem complex, they are accessible to any investor willing to do a little extra leg work.
While nobody should be expected to know the entire IRS tax code, real estate investors should be aware of some very helpful tax credits that can be applied to their assets.
Michele Pasquale, of Meridian Financial Solutions spoke with us previously about increasing your bottom line through cost segregation.
This week she discusses some more tax credits that real estate investors can apply to green or sustainable property endeavors.
179D
- Instated in 2005 Energy Policy Act and renewed annually
- Potentially set to expire end of 2016
- Tax deduction for energy efficient additions to commercial buildings +30,000 s/f
- 3 common components
- Building envelope
- HVAC
- Lighting
- $0.30-$1.80/SF in tax credits
- Calculated on energy efficiency of entire building set to ASHRAEÂ requirements
45(l)
- Residential tax credit for developers of energy efficient buildings
- Potentially set to expire end of 2016
- dollar-per-dollar deduction
- $2000/unit or dwelling
- Qualifying factors
- Apartments, Condos, Town homes
- New construction or rehab up to 4yrs
- 3 stories tall or less
Disposition
- Tax credit for removal and retiring of building fixtures or components
- Book value of components can be written off as business deduction
- Components can not be purchased within same year as tax year filing with deduction and must be no longer in service
Have more questions on these or other possible tax credits? Call Meridian Financial Solutions for a free quote at 561-252-7282
