Stimulus Package Tax Credits

On Tuesday, February 17, President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA). This nearly $800 billion bill allocates approximately 65% to spending and investments and 35% to tax cuts.


As a CEO or CFO of a mid to large organization or a commercial property investor/owner, there are several IRS sanctioned tax benefits within your reach designed to uncover hidden value and profitability within your company and or real estate holdings. We specialize in assisting CPAs, Architects and General Contractors on how to sort through and identify areas of tax savings opportunity with in the recently passed IRS Stimulus / Bail out package.

The IRS has set aside Billions of dollars in tax credits and or tax benefits relating to:
  • Commercial Real Estate Investments
  • Major Renovations / Tenant Improvements
  • Energy Efficiency Projects
  • Research and Development Tax Credits

Federal Tax Benefits for Commercial Real Estate

Engineering Based Cost Segregation Studies

Your commercial property has assets which have probably been overlooked – per the IRS. Through our cost segregation studies, we work to uncover potential tax savings and increase cash flow through reclassification and depreciation of property. We provide a “Detailed Engineering” review as part of our reporting process and works seamlessly with the IRS and your CPA firm.

A tax strategy approved by the IRS in 1997 to reclassify specific real property assets that usually receive a depreciation life of 39 years (commercial real property) or 27.5 (commercial residential) into “tangible personal property” that is treated as five (5) year property or land improvements which are treated as fifteen (15) year property for depreciation purposes. Due to improved treatment, portions of the electrical, plumbing, mechanical systems, and site improvements of a building along with hundreds of other components can be allocated into shorter lives translating into immediate cash flow.

First-Year Bonus Depreciation is Back

You may remember 50% first-year bonus depreciation from a few years ago. Thanks to the stimulus package, it's back for a return engagement — but only for new (not used) qualifying assets that are both acquired and placed in service during calendar year 2008. However, the placed-in-service deadline is extended through Dec. 31, 2009, for certain long-lived assets.

Needless to say, there are some ground rules. To be eligible for the 50% first-year bonus depreciation, an asset must be:
  1. "Qualified property" (including "qualified leasehold improvement property")
  2. Purchased new during calendar year 2008 (no used assets need apply), and
  3. Placed in service by Dec. 31, 2008, or by Dec. 31, 2009, for certain long-lived assets (explained below).

Federal Energy Tax Benefits

You may be eligible for a tax deduction of up to $1.80 per square foot for improving the energy efficiency of your existing commercial buildings or designing high efficiency into new buildings.

The Energy Policy Act of 2005 was recently extended until 2013 and Includes a tax benefit for investments in energy-efficient commercial building property targeting three areas with in the building structure:
  • Heating and Cooling elements
  • Interior lighting
  • Building Envelop
To be eligible, the energy efficient commercial building property, must be placed in service between January 1, 2006 and December 31, 2007. Under section 179 D of the Internal Revenue Code for the proposed or newly installed: lighting upgrades, HVAC, hot water and building envelope, CORE can perform the certification process and conducts this process in accordance to section 1331 of the Energy Policy Act of 2005, Pub. L.No. 109 58,119 Sta. 594 (2005) enacted Section 179 D of the Internal Revenue Code.

R&D Tax Credit Extended Through 2009

The US Congress passed the Emergency Economic Stabilization Act of 2008 (EESA) today. As part of the EESA, the R&D Tax Credit (Research Credit) was extended through 2009. This means it will apply to tax years 2008 and 2009.

Oct 30, 2008 – The US Congress passed the Emergency Economic Stabilization Act of 2008 (EESA) today. As part of the EESA, the R&D Tax Credit (Research Credit) was extended through 2009. This means it will apply to tax years 2008 and 2009.

The R&D Tax Credit drives billions of dollars in economic activity and keeps thousands of high-skilled jobs here in the US. The R&D Tax Credit had expired at the end of 2007 and had failed several times previously to be passed as parts of other bills in Congress.

Within the R&D Tax Credit, the Alternative Simplified Credit has been increased from 12% to 14% for tax year 2009. This is a significant change.

In an effort to increase innovation and hopefully keep and increase jobs here in the US, President Obama has included the cost of making the R&D (R&E) Tax Credit permanent in his budget proposal for Fiscal Year 2010.

Currently the credit needs to be approved every year. In fact in late October 2008, the R&D Tax Credit was approved retroactively for 2008 and extended through 2009 as part of the Emergency Economic Stabilization Act of 2008.

If the credit becomes permanent, it will help companies in budgeting and planning their employee levels from year to year knowing that the credit will be available for the coming year.

The 2010 budget needs to be approved by April 15 so our hope is that it will be passed and include making the R&D Tax Credit permanent.

If we can't save your company money, you pay us nothing!
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