EPACT 2005 FAQ

CAN WE CERTIFY OUR OWN BUILDINGS?  

NO

Before claiming the Commercial Buildings Tax Deduction, according to IRS Notice 206-52, the taxpayer must have the project certified by an engineer or contractor who:

1. is properly licensed in the jurisdiction where the building is located

2. doesn't work for the taxpayer

3. has notified the taxpayer in writing that he or she has the requisite qualifications to certify the project

In other words, you cannot legally certify your own work.  The IRS requires a third party certification on approved software to obtain EPact 2005 deductions.

 

WHAT IS THE MAXIMUM BENEFIT ALLOWED BY EPACT 2005?

The benefit allowed is based on the square footage of the project.  The benefit is capped at $1.80/sqft. or the total cost of the deduction, whichever is less.

 

HOW LONG DOES CERTIFICATION TAKE?

The certification process usually takes 3-5 weeks once all the necessary prints and specs have been received by ECR.

 

WHAT DOES THE PROCESS LOOK LIKE?

1.  ECR uses plans and specs supplied by the client to energy model the building in question using approved IRS software.

2.  ECR models a baseline building using the same software to compare to the building in question.

3.  ECR supplies client with engagement letter which states exactly what the client can expect for a deduction and the cost associated.

4.  Project building is physically inspected to verify it was "built as designed" by an ECR engineer.

5.  Documentation is signed by ECR engineer and delivered to the client.

 

CAN WE CAPTURE DEDUCTIONS ON BUILDINGS BUILT/RETROFITTED IN PREVIOUS YEARS?

yes

The law allows private building owners to capture the deductions on any buildings built or retrofitted between 1/1/2006 and 12/31/2016.

 

is an epact deduction study the same as a leed certification study?

no

While EPact certification and LEED certification do share some of the same aspects they are not the same.  Many buildings that qualify for a LEED certification do qualify for an EPact deduction.  However, the IRS requires the EPact study be completed separately.