Making Other Improvements
Additional energy-efficiency improvements to the building envelope include green- and cool-roof systems, insulation and sealant systems, insulated exterior cladding and deck coating and membranes. Enlisting the aid of qualified professionals to coordinate your green-building improvements can not only pinpoint the most effective building envelope improvements to make initially, but should result in a cohesive plan to ensure you receive the maximum energy savings and tax benefit from your capital expenditure.
For self-storage facilities, the most opportune strategies will be in lighting, and possibly HVAC. Taxpayers in a position to consider energy-efficient upgrades to HVAC and lighting systems as well could be eligible for a total of $1.80 per square foot in §179D deductions. Claiming tax deductions in exchange for spending on energy-efficiency improvements can make a difference by lowering your operating expenses and energy costs for years to come.
In addition to §179D tax deductions, IRS rulings and procedures make it possible to realize significant tax savings through applying correct and appropriate class life to real property. You may even be able to fund your energy-efficiency improvements without going to the bank.
Often, depreciation opportunities are missed and there are usually significant five- and 15-year assets that have been classified as 39-year assets. The IRS allows the property owner to go back in time to pick up that missed depreciation. Any building built or acquired in 1987 or later may qualify for the valuable tax savings a review might yield. A preliminary review may indicate you’re eligible to save taxes and add thousands to your bottom line.
Margaret “Marky” A. Moore is CEO and founder of Capital Review Group, a Phoenix-based consulting firm. She has extensive experience in building engineering, depreciation analysis and capital equipment finance, and has been a nationally featured speaker on energy efficiency and commercial depreciation. She’s a certified sustainable building advisor and certified LEED AP. For more information, visit www.capitalreviewgroup.com.
For more information on §179D of the Energy Policy Act of 2005 and Revenue Procedure 2011-14, visit http://www.capitalreviewgroup.com/energy-certification/certification-179d/ and http://www.capitalreviewgroup.com/sustainability/irs-revenue-procedure-2011-14-claiming-179d-deductions-without-amending-tax-returns/.