When a business is purchased, not only does it incorporate a building structure, but it additionally covers all of its interior and exterior components. Ordinarily, 20% to 40% of those components fall into tax classes that can be written off much quicker than the building structure. A Cost Segregation Study dissects the property's development cost or purchase price that would otherwise be depreciated over 27 ½ or 39 years. The primary goal of a Cost Segregation Study is to recognize all property-related costs that can be depreciated over 5, 7, and 15 years. For example, certain electrical outlets dedicated to equipment such as appliances or computers should be declined over five years.

A residence unit should provide a level of heating and cooling energy consumption significantly less than specific national energy standards, depending on when the team is sold or leased. Based on current development trends, many developments already exceed these standards. All residential developments and apartment buildings completed within the last four years are worth assessing potential 45L tax credits. Eligible construction also includes substantial reconstruction and rehabilitation. Homebuilders and developers can still retroactively claim the 45L tax credit if they did not claim it on previous tax returns.

The basis for developing and supporting the 45L tax credit is a detailed energy analysis that must be certified by a qualified third party. Our multi-disciplinary team of engineers and tax experts will ensure that you obtain the maximum tax credits and provide all the documentation necessary to sustain an IRS audit. We use IRS-approved software programs for the IRC Sec. 45L certification.