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IRS practice unit: Energy-efficient commercial buildings, section 179D deduction (expired)

U.S. deduction, energy-efficient commercial buildings

The IRS Large Business and International (LB&I) division today released a “practice unit”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.


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The title of the practice unit is: IRC 179D energy efficient commercial buildings deduction

Section 179D expired December 31, 2017. This IRS practice unit focuses on the previously available incentive under section 179D that was intended to encourage commercial building owners to install energy-efficient systems including: 

  • Interior lighting systems
  • Heating, cooling, ventilation (HVAC) and hot-water systems
  • The building’s envelope

The practice unit addresses requirements taxpayers had to meet to be eligible to claim the section 179D deduction, and covers key concepts and definitions related to the certification, allocation, computation, limitations, computer modeling, and basis-reduction requirements for the section 179D deduction. It also describes situations when taxpayers were required to recognize a partial disposition.

Read text of the practice unit on the IRS practice unit webpage (posting date of January 28, 2019).

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