2006 Tax Law Changes - Deduction for Energy Efficient Commercial Building Property

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Deduction for Energy Efficient Commercial Building Property

For property placed in service in 2006 or 2007, you can deduct the cost of energy efficient building property. The maximum deduction for any building for all tax years is $1.80 multiplied by the square footage of the building. Energy efficient building property includes property installed as part of:

  • Interior lighting systems;
  • Heating, cooling, ventilation, and hot water systems; and
  • The building envelope.

The property must be certified as being part of a plan to reduce annual energy and power costs for those systems by at least 50% in comparison to a reference building that meets certain requirements. For more information, see Sec. 179D, Energy Efficient Commercial Buildings Deduction.

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