EPAct tax credits for private non-profits and multifamily

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Has anyone investigated obtaining the EPAct 2005 tax credit for EE
commercial buildings for private non-profits (503(c)(3))? It seems like
Section 3 in the 2008 amplification notice is pretty clear that the
credit can be allocated for government-owned buildings, but does anyone
have knowledge as to if this could apply to a 503(c) entity as well?

Also, would a) privately, or, b) government-owned mid & high-rise
residential, or at least the non-residential portions of these
buildings, be applicable? It seems if 90.1 covers these structures,
then the credit might be applicable too, despite the fact the title only
indicates 'commercial'.

Any personal experiences or known sources for interpretations would be
much appreciated.

Thanks,

David Reddy

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Hi David,

1. Off the cuff (I haven't delved into non-profit owners
specifically) - I'm pretty sure the ability for a building
owner/representative to re-allocate calculated deductions as it's
defined applies only to property owned by the (paraphrasing) "Federal,
State, or local government entities." I'm pretty sure this is spelled
out in the 2008 IRS notice. On the same token, I'd anticipate any
designers claiming re-allocated deductions from non-gov't building
owners of any sort may have some trouble, as the IRS hasn't explicitly
allowed them to do so. A possible interpretation by an IRS auditor in
that case may be that you're trying to swindle a building owner out of a
benefit explicitly intended to reward them first.

2. I would advise caution regarding any residential projects,
again off the cuff without looking it up... EPAct is much, much more
than efficient commercial building tax deductions, and I could
definitely see potential for a problem if any overlap occurred with
local/state/federal residential-specific tax breaks being pursued
simultaneous to the section 179D commercial tax deductions you're
referring to. I'd advise re-visiting the original 2005 EPAct
legislation to see if there's any clarification regarding what exactly
is "commercial" for the purposes of section 179D.

That's my take, hope it helps! I'd be interested to hear your
conclusions when all's said and done,

NICK CATON, E.I.T.

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Thanks for all the feedback. After I submitted this, I did some more
searching and found this list of FAQs on the credit:

http://www.efficientbuildings.org/about_the_provision.html

Although I have not yet gone to EPAct to confirm, this information is
inline with comments made by others. Here are the some applicable FAQs
along the lines of the questions I posed:

*What types of buildings will qualify? What types of expenditures will
qualify?*

Section 1331 of H.R. 6 provides that energy-efficient commercial
building property is defined as property that is:

1. Installed on or in any building located in the United States that
is within the scope of Standard 90.1-2001, Energy Standard for
Buildings Except Low-Rise Residential Buildings, of the American
Society of Heating, Refrigerating, and Air Conditioning Engineers
and the Illuminating Engineering Society of North America;
2. Installed as part of (i) the interior lighting systems, (ii) the
heating, cooling, ventilation, and hot water systems, or (iii) the
building envelope; and
3. Certified as being installed as part of a plan designed to reduce
the total annual energy and power costs of interior lighting
systems, heating, cooling, ventilation, and hot water systems of
the building by 50 percent or more when compared to a reference
building, which meets the minimum requirements of Standard
90.1-2001 (which came into effect on April 2, 2003).

*Are churches eligible for the deduction?*

No. Although religious buildings are in 90.1 and they don't pay taxes,
they are not government buildings, so churches don't qualify.

Thanks again for comments!
-DR

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