Congress Extends Commercial Buildings Deduction to 2013

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by Craig DiLouie

The Energy Policy Act (EPAct) of 2005 created the Commercial Buildings Deduction (CBD), which established an accelerated tax deduction rewarding investment in energy-efficient interior lighting, HVAC/hot water systems and building envelope.Initially set to expire December 31, 2007 and then December 31, 2008, the CBD was recently extended by Congress to expire in five years: December 31, 2013.

The Deduction
A tax deduction is a cost subtracted from adjusted gross income when calculating taxable income; tax liability is not reduced dollar for dollar, as is the case with a tax credit, but instead in proportion to the taxpayer’s tax bracket.

Deducting the cost of a capital investment such as new lighting is not special. What is special about the CBD is the owner can potentially write off the entire cost of the new lighting in the tax year in which it is placed in service, instead of capitalized and depreciated or amortized over time. So it’s an accelerated tax deduction: If a cost item associated with installing new lighting is normally depreciated and claimed over a period of years, it can now be claimed in a single tax year.

Originally posted 2009-05-22 20:53:00. Republished by Blog Post Promoter

2 Comments »

1. 

   Very interesting.

   Comment by Bob — May 23, 2009 @ 10:00 am

2. 

   The best information i have found exactly here. Keep going Thank you

   Comment by Kelly Brown — June 12, 2009 @ 6:03 pm

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