Archive for the ‘Energy Tax Credits’ Category

Did you know that contractors who provide energy certification for their clients have the potential to secure more jobs?

At Engineered Tax Services (ETS), we partner with contractors nationally to provide independent, third-party certification as required by the IRS for existing projects, while also providing opportunities for new business.

Our experienced team of engineers can help you assess past, current and future projects for tax benefits and guide you and your clients through the certification process. Through a mutually-beneficial relationship with ETS, you will have a competitive edge by earning repeat and new business over contractors who cannot offer their clients the same energy tax benefits certification. Our technical expertise in energy accreditation is unmatched. Our LEED AP designation strengthens and adds depth to the ETS experience and qualifications under EPACT while supporting energy efficiencies under LEED. We are approved for the Energy Efficiency Certification Process so you can start winning more jobs and increase profitability for your business immediately.

Decrease tax liabilities and increase cash flow for energy-efficient improvements and other investments. ETS is a licensed engineering firm that works nationally with real estate developers, owners, tenants and designers (architects, builders, engineers, lighting contractors, HVAC contractors, roofing contractors) to provide the below IRS ordained tax incentives:

Energy Policy Act 179D Tax Deductions
When a new building is constructed or an existing building is renovated since January 1, 2006, the building owner or tenant may be eligible for a Federal Tax Deduction of up to a $1.80 per square foot. The benefit goes to the designer(s) if it is a government- or non-profit-owned building. Most new construction and renovations comply with the deferral requirements. The tax benefits are for new energy-efficient:

• Lighting
• HVAC systems
• Building envelope, including insulation, roof and windows

The IRS requires an independent, third-party engineering firm with the qualified software to undertake the certification. ETS specializes in the certification required by the IRS to take advantage of these tax benefits.

Cost Segregation Studies
ETS assists real estate owners and tenants who have built, purchased or renovated in the last 15 years. There is an opportunity to accelerate an average of 35% of the depreciation of the building and its improvements with our engineering studies. The IRS says, “It is the Time Value of Money.” The cost segregation study depreciates the building by segments into 5, 7, 10 or 15 year property. The results are increased cash flow and NOI.

Abandonment Studies
When you undertake demolition or renovate a building and tear out old lighting and HVAC units and other building parts, these assets are abandoned and as such their book value can be treated as a business deduction, which also increases your cash flow.

Important: consider these tax strategies before any demolition and/or renovation is completed or you may lose this opportunity.

When you re-light a building you create both an opportunity for the Energy Tax Deductions and the Abandonment Study. Excess lighting (eliminated with the new energy-efficient system) can be depreciated faster than the typical 39 years, and so you maximize your tax strategies and save money.

Contact us for a COMPLIMENTARY initial feasibility analysis

To learn more about how ETS is helping CPAs, contractors, real estate investors and many others take advantage of valuable energy-based tax benefits, or to request detailed information, please contact us at 1.800.236.6519.

NY State passes bill to encourage roofs
that cut energy, reduce sewage overflows

Looking out onto the rooftops of the New York City, not only will you see solar panel systems populating the space but in the past couple years green vegetative roofs have started to become popular as well.

Green roofs offer many benefits to the environment, humans and wildlife. Green roofs, also known as “living roofs,” are essentially rooftop gardens consisting of a waterproof membrane entirely covered with a growing medium and vegetation. These roofs tend to be environmentally friendly. Research shows that mobile species, such as birds and invertebrates, co-exist on green roofs. These colorful gardens offer a home to wildlife and compensate for much of the harm done to the environment by overpopulated cities.

Green roofs also offer the following benefits:

• Vegetation and soil layers add an extra layer of insulation to roofs, reducing heating and cooling costs.
• They add usable space to the roof and increase the building’s property value.
• Vegetation and soil layers protect roof membranes from ultraviolet radiation, extending the life of the membranes up to twice as long as a conventional roof.
• The soil provides additional insulation to the roof, reducing heating and cooling costs approximately 10% to 30% and allowing the building to use smaller HVAC equipment.
• The vegetation and soil layers reduce noise from traffic, planes, machinery, and other sounds for building residents.
• The vegetation improves air quality from oxygen/carbon dioxide exchange.
• The soil absorbs rain, reducing storm water runoff.
• Reduce cooling cost by keeping the roof top at ambient temperatures
• Reduce carbon dioxide in the air
• Offer additional usable space in your building for a respite from the city

In 2008, the State of New York announced a one-year property tax credit of up to $100,000 to support Green Roof installations. Whether your facility’s plans include a roof replacement, or you are interested in helping the NY environment, consider taking advantage of this program!

Urban areas of New York generate considerably more storm water runoff than natural areas of the same size due to a greater percentage of impervious surfaces, such as roofs, that impede water infiltration. Green Roofs aid in mitigating storm water runoff, and the property tax credit is designed to improve the infrastructure of storm water management.

About the Tax Credit:

• This is a one-year property tax credit
• The Credit is for $4.50/square foot, up to a maximum of $100,000
• $4.50/s.f. can represent 20%-30% of the costs associated with building a green roof 

Who Qualifies:

• The building must be located in the state of NY with city populations of 1,000,000 or more
• The Green Roof must have at least 2″ of growing media
• The Green Roof must cover at least 50% of available rooftop space
• Building owners may apply for the credit beginning January 1, 2009 and ending December 31, 2012

A green roof is not suitable for every building. A host of factors must be considered, such as the construction and condition of the existing roof, its load-bearing capacity, zoning restrictions, and code compliance. A feasibility study should first be conducted to determine if the building is a candidate for a green roof, and if so, which type of green roofing system is most suitable for that particular building.

Green roof tax credits are available in other cities as well. Please contact us for more information.

The Author of this post, Joel E. Ackerman, CPA, is Director of Business Development for the Northeast for Engineered Tax Services, Inc. He earned a Masters degree in Tax from C.W. Post – Long Island University and a Bachelor of Science degree from Syracuse University. With over 16 years of experience in public accounting, Joel specializes in engineering-based real estate tax products such as cost segregation studies and energy efficiency studies.  He is active in the local CPA community and serves on the Board of Directors for the Suffolk County chapter of the New York Society of Certified Public Accountants. He is currently planning a series of seminars for the Suffolk and Nassau County Bar Associations on the benefits and technical aspects of real estate related tax and engineering opportunities.

By Don McDougall

With Circular 230, tax preparers were made responsible for decisions that were not theirs and are now acting as much as anything else as the first line of enforcement. EPACT certification creates a major issue for CPAs, as many do not have enough experience with the process to protect themselves and their firms. EPACT has provisions to prevent fraud that are embedded in the regulations. Under Circular 230, it becomes the CPA’s responsibility to confirm that the requirements have been met. In order to protect your firm and yourself, please read on.

WARNING! EPACT is not just like Cost Segregation. EPACT generates a tax deduction; Cost Segregation accelerates the depreciation of an asset by giving it a shorter life. If you have been told they are just versions of the same accounting issue, you need to beware.

Who can do your reports? – More importantly, who can sign your reports? The reports MUST be completed by a licensed firm or individual. This means both the field verification and the energy calculations must be done by licensed people.

The reports themselves must be signed by a licensed firm (engineering or contactor) and should contain copies of the licenses for the individuals who did the work. Consider an example of a company that has CPAs on staff. Exxon-Mobile has CPAs on staff, but Exxon cannot do your tax returns. Likewise, a CPA firm or consulting firm cannot sign your EPACT certification. The reports may completed by firms that are not licensed engineering firms, but must be signed by the licensed engineer who actually did the work. The firm that subcontracted them or hired them cannot sign the report. In addition, that engineer carries 100% of the liability for any errors. Like the example above, you can have a friend who is a CPA that works at Exxon to do your taxes, but he cannot do it on Exxon letterhead.

There are also issues of liability and coverage in the event of an audit. If the firm is not licensed as an engineering firm, not only can they not sign the work, they also cannot defend it to the IRS. This frequently leaves you, their tax-preparing CPA, holding the liability bag. Who signs the reports matters to you even more than it matters to the IRS (because there will be consequences for YOU, not the IRS).

In addition, ALL of the field work and the calculations must be completed by licensed individuals. A common mistake many Cost Segregation firms make is using their non-licensed staff to complete the field inspections to save money. This is clearly not allowed under the guidelines: all work must be completed by licensed individuals.

Another caveat in the certification process: the firm performing the EPACT Certification may not be related to any part of the transaction. For example, a lighting contractor may not certify his/her own work. Contingency fees that rely on the conclusions of the certification to set the cost of the study are also to be avoided.

Summary – The 179D Certification must be signed by a licensed engineering firm, or a licensed individual. Reports not completed by a licensed engineering firm put you (the Tax Preparer) at risk. The firm completing the certification also cannot be involved in the installation or design of the properties that are being certified.

Follow these simple guidelines and you will protect your licensure as well as your firm.

Don McDougall is a National Director with Engineered Tax Services. He is responsible for operations on the West Cost with some national efforts as well. Don is an innovator in the fields of valuation and tax-based engineering. He has proudly contributed and pioneered many of the commonly-integrated services and components used in the industry. He has been providing cost segregation services since before cost segregation existed, having worked heavily in the field of investment tax credits (the depreciation services that pre-date cost segregation).

Joel Ackerman, CPA

The Energy Policy Act of 2005 (EPACT) provides substantial tax benefits. Under Section 179D of the Internal Revenue Code, owners of energy-efficient commercial buildings may take a tax deduction of up to $1.80 per square foot for qualifying construction or retrofits. 

To help reduce the energy consumption and CO2 pollution from commercial properties, Congress passed The Energy Policy Act of 2005, which provides substantial tax benefits where energy efficiencies are designed within a building.

The IRS Regulations require an independent engineering study in order to substantiate and make a valid claim for these federal tax deductions. These deductions became available as of January 1, 2006 and have recently been extended through December 31, 2013.

How does entity type affect the taxable income to building owners? Read the Full Article for details about the general tax treatment of each type of entity.

By James K. Zahn, FALA, Esq.

Recently, I received a call from my accountant. She called to inquire if I have ever had one of my architect clients attempt to receive a § 179D Deduction for Energy Efficient Commercial Buildings granted under Title 26 of the US Federal Regulations (fondly known as the “IRS Tax Code”). I was unaware of this particular section of the Code until her call, as none of my clients have ever asked about it or brought it to my attention. This article will concentrate on publicly-owned commercial buildings, because that’s where the architect is really in a position to greatly benefit from this unusual regulation. 

According to the US Government Printing Office, the IRS Tax Code is 13,458 pages long, and is contained in twenty volumes available for purchase at only $974, plus shipping and handling. Section 179D is a very small provision buried within a voluminous document and can easily be missed. I looked up § 179D on the internet and was astounded by what I found. This particular section of the tax code is a must read for all practicing architects and their accountants!

Read the Full Article for information every architect should know.

For Immediate Release

For more information on ETS, please contact 800-236-6519 email info@engineeredtaxservices.com or visit www.engineeredtaxservices.com

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New York – Feb. 8 – Patrick Pruett’s Alliance of Professional Association held their Real Estate and Construction Advisors Association Teleconference for its internal members. The teleconference was centered on successful funding practices for contractors and provided a detailed discussion on LEED and green building design. It also addressed concerns within the CPA community and their role in the reporting requirements with contractor clients.

Joel Ackerman, Director of Business Development for Engineered Tax Services was invited as a presenter in the roundtable conference. He discussed LEED and Green Building incentives, including the benefits of LEED certification in construction and its impact on project costs, tax reporting and rebates. Mr. Ackerman described to the audience the steps necessary for LEED certification and the process to qualify for Section 179D. ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, construction audits and insurance appraisals. ETS is a licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions resulting in increased cash flow, minimized tax payments and increased ROI. ETS works in collaboration with clients’ CPA firm to ensure the process of obtaining your tax benefits follows legislative guidelines. For more information, please contact us at 800-236-6519 or email us at info@engineeredtaxservices.com

New York – Feb. 5 – John Cummings, Director of Business Development for Engineered Tax Services, was invited to speak at JH Cohn’s New York City office regarding the Energy Policy Act of 2005.   JH Cohn works closely with Engineered Tax Services to provide its clients with a resource for identifying and certifying tax deductions available to clients from the Act.  

Mr. Cummings’s presentation drew nearly fifty guests consisting of CPA’s from JH Cohn’s New York and New Jersey offices, clients with real estate holdings, architects and engineers involved in green design for federal, state and local governmental entities throughout the area and consultants from several green energy services companies.   The 50-minute presentation addressed the basic requirements of the EPAct, the benefits available to property owners, architects, engineers and contractors and the methodology applied by ETS.   

Engineered Tax Services is a nationally-licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions that result in increased cash flow, minimized tax payments and increased return on investment.  ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, energy audits, carbon footprint certification and insurance appraisals. For more information, please contact 800-236-6519 or email info@engineeredtaxservices.com

Hauppauge, NY, February 02, 2010 – Engineered Tax Services proudly announces that they have been recognized by the Suffolk County Bar Association (SBA) as a go-to resource for engineering-based tax information and services. The SCBA published Joel Ackerman’s “Using EPAct to Speed Tax Payback” in their December 2009 newspaper, The Suffolk Lawyer, which reached thousands of attorneys on Long Island.  

The published article is printed below in its entirety:

“Using EPAct to Speed Tax Payback”

The Energy Policy Act of 2005 (EPAct) is a complicated government method that encourages integrators to make US buildings more energy-efficient. Less than 1 percent of eligible buildings owners or leaseholders have taken advantage of this multi-billion dollar benefit.

The US government does a lot of good things to encourage more efficient building; unfortunately the process is cumbersome and requires third-party engineering certification. This comprehensive tax legislation is where we find the $1.80 per square foot tax benefit we all talk about and we’ll attempt to clarify the process and increase the awareness of this very important benefit. The elusive $1.80 that EPAct holds can be broken down into three categories: Lighting, HVAC and Building Envelope. Each is worth $0.60/SF in tax benefits. The EPAct relies on the ASHRAE 90.1-2001 specification as a baseline to calculate savings percentages. To qualify for the full $1.80, the building must be 50 percent more efficient than this 2001 standard. To qualify for the partial incentive, the savings must be 16 ²/₃ percent better than 90.1-2001 in the respective categories.

Lighting

Lighting consumes approximately 40% of the energy in commercial buildings; the goal is to rein in this energy hog. By using a $0.60 per SF tax benefit, EPAct encourages the use of more efficient fixtures and controls. In order to qualify for the lighting portion of the available deductions, lighting energy consumption must beat the ASHRAE 90.1-200 1 specifications for efficiency by 16 ²/₃%. If the building is undergoing a lighting retrofit or adding controls, it is worth investigating whether or not this new system will qualify for the $0.60 lighting deduction. In majority of cases the lighting savings level is achieved and can be introduced to your ROI calculations – win-win.

HVAC

HVAC is the second largest energy consumer in commercial buildings and can be very tricky to retrofit without major renovation and disruption to the space. The addition of new controls has the ability to bring the system energy consumption down by 16 213 percent in order to achieve the second tax benefit of $0.60/SF. This total of $1.20/SF could be included in the ROI calculations for your building owner. In a 100,000 SF building, this could be as high as $120,000 in tax benefits. Unlike tax credits, deductions don’t translate dollar for dollar; rather they are calculated as part of your tax return. The numbers add up fast and can make the purchase decision for your building owner easier.

Architects and designers

The benefits get even better for the architect and specifying segment of the market. The Government doesn’t pay tax, so what happens when the tens of thousands of schools, federal and state buildings are upgraded? Prior to 2008 this tax benefit was simply lost, or wasted. The government quickly realized that in order to encourage architects and designers to implement energy efficiency in federal buildings they had to provide encouragement. The EPAct was amended to run until 2013 and included a provision that for all public, government or non-profit buildings the EPAct tax benefit would go back to the designer of the specifications which could be the architect, designer or lighting contractor. This has resulted in approximately $25Mper month in tax benefits being discovered by one engineering/tax firm alone. As with many Federal grants and subsidies this EPACT deduction is out there to reward taxpayers for their efforts in saving energy. What better reward than with cash in the pocket from tax savings.

Want to be a hero to your clients? Did your client construct or renovate their lighting, HVAC, or building envelope to their commercial building? Discuss EPACT — you could save the client thousands of tax dollars.

Joel E. Ackerman, CPA is Director of Business Development for the Northeast for Engineered Tax Services, Inc. He earned a Masters degree in Tax from C.W. Post – Long Island University and a Bachelor of Science degree from Syracuse University. With over 16 years of experience in public accounting, Joel specializes in engineering-based real estate tax products such as cost segregation studies and energy efficiency studies.  He is active in the local CPA community and serves on the Board of Directors for the Suffolk County chapter of the New York Society of Certified Public Accountants. He is currently planning a series of seminars for the Suffolk and Nassau County Bar Associations on the benefits and technical aspects of real estate related tax and engineering opportunities.

ABOUT ENGINEERED TAX SERVICES

ETS has provided thousands of energy tax certifications since 2005. Handling over 50 certifications every month, they have perfected the process by working closely with the Internal Revenue Service on a regular basis. Their precise documentation meets and exceeds the standards required by the Department of Energy and the IRS and has consistently withstood the toughest scrutiny.  ETS is a member of the U.S. Green Building Council (USGBC). With the most innovative and highest-quality LEED and green building knowledge and training, the approved USGBC educational courses helps green building professionals across all market sectors build the capacity to build their careers.

Engineered Tax Services (ETS) is a nationally licensed engineering firm with professionally staffed engineers who marry the science of engineering with the principles of tax and accounting to arrive at financial solutions that result in increased cash flow, minimized tax payments and increased return on investment.  ETS engineering professionals have over 100 years of combined experience in energy modeling. The ETS team consists of multi-disciplinary professionals including Professional Engineers (PE), LEED Accredited Professionals (AP), Certified Public Accountants (CPA) and architectural professionals. ETS specializes in providing a wide spectrum of engineered accounting solutions such as energy tax credits, cost segregation studies, energy audits, carbon footprint certification and insurance appraisals.

CONTACT:
Joel Ackerman

Engineered Tax Services

Toll Free: 1.800.236.6519

Northeast Office: 631-870-3920

email: jackerman@engineeredtaxservices.com

website: www.engineeredtaxservices.com

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