New Energy law - New commercial bldg in 2006

[TAX]

My client, doctor, is constructing new building this year.

Can he be benefited by new energy law? - Energy Efficient Commercial Buildings Deduction (IRC §179D).

Taken from your updates, please see below:

"Energy efficient commercial building property is depreciable property installed as part of the interior lighting, heating, cooling, ventilation, and hot water systems, or the building envelope. The property must be certified as being installed as part of a plan designed to reduce the total annual energy and power costs by 50% or more in comparison to certain standards set by the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illumination Engineering Society of North America. Special rules apply for a partial allowance if such standards are not met. The code requires that qualified computer software be used to calculate the deduction under the partial allowance rules. Any deduction allowed under this provision reduces the basis in the property"

How much is the deduction? Is it woth it?

Can the client still do segregation study?

Thanks.

[Bees Knees]

Look just a few sentences before the ones you quoted. It says:

“A new deduction is allowed for the cost of energy efficient commercial building property placed in service during 2006 and 2007. The deduction is limited to $1.80 times the square footage of the building, minus any deductions under this rule with respect to the building for all prior years.”

Is it worth it? I don’t know. If you have a 30,000 square foot commercial building, you could deduct up to $54,000 worth of improvements in one year that normally would have to be depreciated over 39 years.

Is that worth it?

[cbarstow]

Commercial Buildings Energy Deduction

Sure, the deduction is worth it, but on what form is it deducted?
Form 3800?
I couldn't find a specific form to use.

[JoshinNC]

Note that this offsets Section 179

If the client has significant Section 179 property placed in service in the year of the building being placed in service these must be netted together. So, if you have $54,000 for the building and another $100,000 in equipment, furniture, computers, etc. you will have to reduce the available Section 179 deduction by the amount over $108,000.