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The qualifying interior lighting systems that were incorporated into the building were found to meet and exceed the requirements for EPAct 2005. The lighting systems incorporated into the building were found to reduce the lighting power density by a 66.14%.
Upon further evaluation, ETS identified and assigned value to the building improvements for lighting that have been removed and replaced to enhance energy efficiency, maintain savings, and improve the quality of the lights. The retired assets were identified, valued, and discounted for the depreciation taken.
The 179D energy certification calculates the tax deduction achieved from the installation of energy-efficient assets, including HVAC, building envelope, and lighting. The building may qualify for up to $1.80 per square foot ($0.60 per square foot for each system); however, partial deductions are allowed for lighting. The 179D energy deduction is available for newly constructed or energy renovated commercial buildings as well as apartment buildings 4 stories or more. Commercial property owners who pay taxes can claim the benefit with the exception of government-owned buildings where the tax deduction may be allocated to the designer. In order to qualify for these deductions, an analysis of your energy savings is required by a qualified firm like Engineered Tax Services. The savings are significant can additional tax benefits are often identified through the engineering process. Contact ETS for more information.
When you undertake demolition or renovate a building and tear out old lighting, HVAC units, and other building parts, these assets are disposed of. As such, their book value can be treated as a business deduction. Tangible personal property within a structure can be written off when a building is demolished or remodeled. The value must have been identified prior to the demolition and it must not have been purchased with the intent to demolish. Learn more about the disposition studies here or visit our disposition calculator here.