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 ASHRAE 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