Source: http://www.itaxblog.com/category/epact-%C2%A7179d/
Timestamp: 2017-10-24 11:27:27
Document Index: 744412062

Matched Legal Cases: ['§179', '§179', '§179', '§179', '§179', '§179', '§179', '§179', '§179', '§179']

Epact §179D | iTaxBlog
Category Archives: Epact §179d
Chris Henderson, VP of Operations
In January 2011, the IRS issued Revenue Procedure 2011-14 that provided an alternative accounting method for claiming the EPAct 179D tax deduction for sustainable design. Rather than amending tax returns, architectural firms that had not previously taken the deduction were allowed to claim the deduction on their current year’s return using a Form 3115 along with a certification report and an allocation letter.
However, this week, IRS author of 179D guidance, Jennifer Bernardini provided clarification with regard to Form 3115. While admitting that ambiguity exists in Rev Proc 2011-14, she stated the Office of Chief Counsel, the IRS division that reviews accounting methods, was unlikely to grant any accounting method change submitted by architects that have not previously claimed the 179D deduction. She also indicated the IRS is working on guidance that would clarify the ambiguity found in Rev Proc 2011-14 but gave no timetable.
While Ms. Bernardini’s comments represent her own opinion and not those of the IRS, her comments can be interpreted as the prevailing thought at the Service. As such, SourceCorp recommends filing amended returns to claim 179D deductions associated with projects completed in prior tax years. To ensure that all 2008 projects are reviewed while still under statute, firms should gather complete blueprints and specifications as well as applicable allocation letters as quickly as possible.
SourceCorp is keeping close tabs on this issue and will communicate further updates.
SourceCorp to Present EPAct 179D at DesignColumbus 2011
The U.S. Green Building Council – Central Ohio Chapter and the Construction Specifications Institute Columbus Chapter announce the first annual joint trade show and educational event to be held April 18, 2011 at COSI Columbus.
DesignColumbus2011 is an opportunity to learn about and engage in the transformation of the Central Ohio built environment to be more healthy, prosperous, and sustainable. With 16 educational seminars and a two-floor trade show, the event will highlight current and future development of technologies for all leaders in Central Ohio responsible for creating building and communities that promote economic growth and sustain the health and vitality of all life. SourceCorp’s Bob McPherson and Jeanne Briggs will lead an educational seminar on the EPAct 179D tax deduction.
IRS Provides Alternative for EPAct §179D Filers
The Importance of the Allocation Letter to the EPAct §179D Tax Deduction
Jennifer Chin, National Director of EPAct 179D
Architectural firms that design schools, government and municipal properties may qualify for the EPAct §179D tax deduction. This change came about in 2008 and is meant to incentivize a struggling construction industry to design and build sustainable properties.
Because government entities are tax exempt, they cannot use the §179D deduction. However, they can assign the deduction to an architectural firm by signing an allocation letter acknowledging the firm as the primary designer. On occasion, a firm will meet with a certain amount of resistance when requesting a signature.
To help alleviate this issue, it is important for the government entity to understand how the deduction works for the architectural firm. For example:
If a $100,000 deduction is confirmed, at a 35% tax rate it will equate to a $35,000 reduction in tax or refund of previous taxes paid. If you assume $12,000 in fees for third-party certification, the net benefit to the architectural firm is $23,000.
The §179D deduction is used to offset taxes owed or previously paid. There is no way to truly share this deduction with a government entity. On occasion, we see firms offer to make a charitable contribution to the government entity or reduce their fee on a future project, but this is not necessary.
It is important the government entity is not viewed as requesting a kick-back for an incentive that was intended for architects. It is not up to the government entity to grant permission for an architectural firm to use this deduction but only to acknowledge them as the primary designer.
For more information on the EPAct §179D tax deduction and how it applies to architectural firms, watch our YouTube video. You can also visit us at sourcecorptax.com. SourceCorp is a national tax specialty firm that provides independent certification for EPAct §179D qualified properties.
LIVE Discussion: EPAct 179D Tax Deductions for Architectural Firms Structured as Flow-Through Entities
§179D Benefits to Increase?
Chris Henderson, VP Operations
I’m passing this along from our friends at the National Electrical Manufacturers Association (NEMA). We’ve seen this proposal before, but it would be tremendously beneficial for designers of government owned green buildings if this legislation becomes law.
Yesterday, Senators Bingaman (D-NM) and Snowe (R-ME) introduced S. 3935, the Advanced Energy Tax Incentives Act. This contains a number of incentives that have been advocated during the past two years, including Section 102 which increases the deduction from $1.80 to $3.00 (partial deduction increased to $1.00 per square foot per system) and modifies Section 179(D) to facilitate the ability of REITs (real estate investment trusts) to claim the deduction.
A summary of its provisions is available online at http://bingaman.senate.gov/policy/aetia_summ.pdf.
Here are the statements made yesterday: “We must continue to ensure that the Tax Code contains well-designed incentives that will help us transition to an energy efficient economy,” explained Senator Bingaman. “Our bill will significantly expand domestic clean energy manufacturing; help American businesses and families reduce their energy use and dependence on fossil fuels; and create thousands of jobs. This is a common-sense, bipartisan proposal that deserves priority consideration.”
“For far too long our country’s energy strategy has prioritized the technologies of the past while our policy debate has languished in partisanship. The world is moving ahead with bold action on innovative technologies and it is past time that we set a new course for how we use and think about energy,” said Senator Snowe. “Energy efficiency has emerged as one of the most effective and expeditious initiatives that can be taken to preserve valuable resources for producers and consumers and I believe we can build upon the success of past tax credits with these critical energy efficiency tax incentives, which will spark innovation in our building and industrial sector and afford our constituents and businesses financial incentives to simultaneously reduce their energy bills and invest in our economy. I appreciate working with Senator Bingaman on this comprehensive energy tax package and look forward to enacting these provisions into law.”
The 111th Congress is now in recess until November 15 when they will return for a week prior to Thanksgiving, and then Congress will return for a week in early December. Whether energy tax legislation will be taken up remains to be determined.