179D Tax Deduction Terminated by the One Big Beautiful Bill
The §179D tax deduction for energy-efficient commercial buildings will no longer apply to construction projects after June 30, 2026. To qualify for the §179D deduction, construction must begin before June 30, 2026, as mandated by the One Big Beautiful Bill Act of 2025.
The current deduction amount for buildings placed in...
Navigating the Complexities of IRC §179D: Why Expert Guidance is Essential
The IRS has updated its Practice Unit on the §179D Energy Efficient Commercial Buildings Deduction. While not official guidance, these units provide valuable insights into IRS audit and enforcement approaches. The latest §179D updates introduce new eligibility rules, compliance requirements, and higher deduction limits. Given the complexity of these provisions...
Tax Court Case: Lighting Contractor Failed to Meet Definition of “Designer”, Denied §179D Energy Efficient Commercial Building Property Deduction
In a 2024 case, United States of America v. Oehler et al, the tax court denied the Energy Efficient Commercial Building Deduction under IRC §179D to a lighting contractor for work they performed upon public schools since it failed to meet the definition of a “designer”...
IRS Released Final Regulations for Satisfying Prevailing Wage and Apprenticeship Requirements for Green Tax Incentives
The IRS released final regulations and related guidance regarding bonus credits and deductions for taxpayers that satisfy prevailing wage and apprenticeship (PWA) requirements. The regulations apply to certain “green” energy tax provisions, such as the §179D Energy Efficient Commercial Building Deduction and the §45L Energy Efficient Home Credit, as well...
§179D Energy Efficient Commercial Building Deduction Future Reference Standards
The IRS recently released Announcement 2024-24, notifying taxpayers that Reference Standard 90.1-2022 is the applicable reference standard required under the §179D Energy Efficient Commercial Building Deduction for ‘Energy Efficient Commercial Building Property’ (EECBP) placed in service after December 31, 2028, and the construction of which did not begin by December...
Maximum §179D Deduction Increased to $5.65 for 2024
The §179D Energy Efficient Commercial Building Deduction is a federal tax incentive encouraging energy efficient construction by providing building owners and designers with substantial financial benefits. An exciting aspect in 2024 is the inflationary increase of the maximum §179D Deduction to $5.65 per square foot for projects meeting the prevailing...
Tax Court Case: Engineering Firm Overstated §179D Energy Efficient Commercial Building Property Deduction
In a recent case, Michael Johnson, et ux. v. Commissioner, the tax court denied the majority of a taxpayer’s Energy Efficient Commercial Building Deduction under IRC §179D since it claimed a §179D Deduction exceeding the cost of the Energy Efficient Commercial Building Property (EECBP)...
New IRS Form 7205 for the §179D Energy Efficient Commercial Building Deduction
The IRS recently published Form 7205 and the corresponding Instructions for taxpayers claiming the §179D Energy Efficient Commercial Building Deduction. In prior tax years, the §179D Deduction was listed as an Other Deduction, but the new Form 7205 allows qualified business entities and individuals to claim the deduction under section...
IRS Clarifies the Applicable ASHRAE Reference Standards for the §179D Energy Efficient Commercial Building Deduction
The §179D Deduction requires energy modeling whereby the building is compared to the same building constructed to the minimum requirements of a specified ASHRAE 90.1 Reference Standard. In Announcement 2023-1, the IRS affirmed ASHRAE 90.1-2019 as the new Reference Standard. The new standard will be applicable for any projects placed...