Investment Tax Credits

Investment tax credits are tax incentives that permit companies or individuals to deduct a specified percentage of certain investment costs from their tax liability, or sell the tax credits to generate additional income.

These tax credits are in addition to the normal allowances for depreciation; although the depreciation can also be monetized. Investment Tax  Credits are similar to investment allowances, which permit investors or businesses to deduct a specified percentage of certain capital costs from taxable income. Essentially, investment tax credits are subsidies for the investment in renewable energy. Investment credits are applied toward the support of energy conservation, pollution control, or various forms of desirable economic development. These tax credits are structured to both reward and encourage economic growth.

Section 179 Deductions

The Section 179 Deduction contained in the IRS Tax Code allows businesses to deduct the full purchase price of qualified equipment and/or materials purchased or financed during the tax year. With respect to energy efficient utilities, lighting, and building envelope this can amount to a deduction of $1.80 per square foot, and provide a significant financial advantage to a commercial real estate owner. This type of deductibility analysis is sometimes referred to as cost segregation.

Cherrytree is an innovative real estate and business consulting company that advises real estate owners, developers, operators, and landlords, on tax credits, deductions, grants, incentives, and reimbursements. Our advice includes identifying strategies for acquiring eligibility for these tax credits and assistance in applying as well as generating the maximum reimbursement.