Have you heard of EPAct? You may qualify for federal tax incentives and additional savings up to $0.60 per square foot for both lighting retrofits and new lighting projects. Both residential and commercial rental property owners will see the greatest benefit by this measure.
Certain assets are depreciated for tax purposes; you can spread the cost of a qualifying asset over a period of time. When the asset is sold, the increase on the sale will be higher because of the source being lower. Part of the gain will be taxed as “capital gain” and can quality for a maximum of a 15% rate on long term gains. However, the portion of “depreciation” will be taxed at a maximum 25%. This is known as “1250” gain.
The 1250 category is the primary fixture and lighting for the building (non decorative). It is rated to have an approximate life of 40 years. To the recipient, this means after 20 years, almost half of the original cost of the lighting originally purchased will still be on your taxes. When the original lighting is torn out and replaced with new more efficient lighting, it is put in the books of the old lighting and can be reduced as a tax deduction.
Category 1245 is related to decorative lighting and has approximate life of 7 years. In addition, this 1245 category asset can qualify for bonus depreciation – With “bonus depreciation” you may be eligible for up to half the cost of the original lighting purchase as an expense.
No matter what your needs are, be sure to give us a call for your next lighting project. Priority Lighting will ensure you receive the maximum rebate potential, most energy-efficient lighting products, resulting in the greatest ROI possible.