Cost Segregation delivers results every time it's applied!

Does the IRS 45L tax credit make sense to employ?

Posted on January 10, 2012 by Jeff Hobbs

Per IRS’ guidelines, for a homebuilder to qualify for the New Energy Efficient Home Credit under IRC Sec. 45L, they must receive a certification that the dwelling unit has met the energy savings requirements of Sec. 45L. An eligible certifier must use an approved Software Program to calculate the dwelling unit’s energy consumption for purposes of Sec. 45L. Sec. 45L provides a $2,000 credit for a traditional free-standing home and either a $1,000 or $2,000 credit for a manufactured home depending on the level of energy savings achieved. Most consider this code the “Go Green Tax Credit” as it promotes energy saving construction and rehabilitation of older properties.

A nice caveat is that even apartments, condos and university dorms qualify if they are no taller than 3 stories and meet the energy-savings requirements. Typically, most newer homes and apartment buildings max out the credit and with the low fees usually giving at least a 300% ROI, it definitely makes financial sense! And, when employed with cost segregation for rental property, it makes for a tax credit home run!