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Tax Incentives

Tax incentives are a form of tax relief that can help you with your tax liabilities. It can also reward you by using the incentives that have been put in place. These incentives can be a godsend for all involved. However tax incentives often can be confusing for the common man. Taxes alone can have a major impact on our livelihood and questions could be raised without knowing where to turn for the answers. Below is the most commonly asked questions about tax incentives that have been answered by the experts.

Are there any tax incentives for donating warehouse space to charity?

The value of the lost rental income is considered in most cases a “cash” donation. The cost of maintenance of the space may also be considered a deduction.

If I lease a solar electric system for a rental house can I write off 100% of the total cost of the lease as long as it is being leased?

In most cases you could write off the full expense of the lease. You might also be eligible for additional tax incentives for use of alternative energy sources.

If a housing corporation gets on the National Register of Historic Places does this enable them to avoid real estate taxes?

In most cases just the fact of being listed In the National Register of Historic Places does not allow exemption to real estate taxes. However if the applying organization owns the property which the request is made they may qualify for exemption from property tax. There are also some federal tax incentives for the rehabilitation of historic and old buildings. These are exclusive and depend upon the building type and the nature of the property.

Is there a tax credit for a contractor who remodels a residence to become handicap accessible?

In most cases there are no federal tax credits for this type of activity. However, there may be local tax abatements available in the place that you are building. A person could also check with any organization related to the particular handicap involved; they may offer funds to help with the cost of remodeling.

What tax incentives are available in the state of New York for installing solar panels in a manufacturing environment?

There are numerous tax incentives for businesses looking to use renewable energy. The American Recovery and Reinvestment Act (ARRA) are providing many ways to make your business more environmentally friendly. A few are listed below:

The New Clean Renewable Energy Bonds are tax credit bonds that can be issued to finance certain types of facilities that generate electricity from renewable sources.

Qualified Energy Conservation Bonds are tax credit bonds that can be issued to finance governmental programs to reduce greenhouse gas emissions and other conservation purposes.

Extension of Renewable Energy Production Tax Credit generally extends the “eligibility dates” of a tax credit for facilities producing electricity from renewable energy sources.

Election of Investment Credit in Lieu of Production Credit provides either an energy investment tax credit which provides 30% tax credit for investments in energy projects, or the production tax credit, which provides a credit of 2.1 cents per kilowatt-hour for electricity produced from renewable sources.

Repeal of Certain Limits on Business Credits for Renewable Energy Property law repeals the $4,000 limit on the 30% tax credit for small wind energy property and the limitation on property financed by subsidized energy financing.

Coordination with Renewable Energy Grants law provides that the taxpayer can apply for a grant instead of claiming either the energy investment tax credit or the renewable energy production tax credit, the grant is 30% of the investment in the facility.

Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property law modifies the credit rate and limit amounts for property placed in service from 2009 to 2010. Qualified property is now eligible for a 50% credit, and the per-location limit increases to $50,000 for business property, and $2,000 for other including residential. While the per-business location limit rises to $200,000.

Tax Incentives can be the light in a dark room of tax questions. The wise business owner, whether it is a small business or a large corporation, will be aware of all the incentives that are available to them. This can play a very large part in making a business successful. Many questions that can come up dealing with Tax Incentives can be answered by the Experts.
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Recent Incentives Questions

  • Hi, I too work for a contract furniture dealership, for which

    Hi,
    I too work for a contract furniture dealership, for which I get paid a salary. I too receive SPIFF incentives which totaled a sizable $60K last year. Since I am not self employed, and I do not have any special expenses to write off due to the incentive income, I believe it should be considered as wages. Although, my tax accountant feels I should file this income as self-employed. I disagree, but do not want to get myself or my tax accountant in trouble with the IRS by filing it wrong. Could you shed light on how this income should be classified for filing purposes?
    Thank you,
    Donna
  • I am planning on purchasing an electric vehicle, which I hear

    I am planning on purchasing an electric vehicle, which I hear offers tax incentives. If I purchase this vehicle via my company will I be able to take advantage of the federal and state tax credit? The vehicle is a Toyota Prius Plugin Hybrid.

  • My father in law is a self employed farmer, files a Schedule

    My father in law is a self employed farmer, files a Schedule F with his 1040. The landlords that he farms for are going to be selling their ground to another investor this year. The current landlord provided the machinery & equipment and gave my father in law a % of the income each year. The new landlord/investor would like my father in law to provide the machinery and equipment and they will do a crop share. The current landlord is going to give my father in law a severance and he will also have his %, so this will be a high income year for him.

    My father in law had one employee, my husband. When the new investors/landlords take over starting next year, my father in law and my husband would like to be equal partners and form an LLC.

    My father in law would like to purchase machinery and equipment in his name this year to offset his high income year. If the senate passes the Section 179 expensing to go to 500,000, he will be able to take advantage of that. Even if the Section 179 is a lower amount, he will still be able to take a lot of MACRS depreciation. The mach/equip purchase will be approximately 800,000.

    So next year in 2015, when my husband and his father set up an LLC, what is the best way to do that with my father in law owning all the equipment?

    Does my father in law take out a loan in his name to purchase the equipment this year and then next year put the machinery and the loan into the LLC and my husband put in cash so the LLC fair market value is equal. So say my father in law's loan value is $700k and the machinery fair market value is $800k, so net value of $100k; so my husband would put 100k in to the LLC to make it equal?

    Or does my husband take out a loan to his father to purchase 50% of the mach/equip in 2015? And then they both put in 50/50 of the machinery and equipment to start the LLC? But this doesn't make sense since I'm guessing then my father in law will have to record a gain in 2015 since all or most will be depreciated/179?

    I'm just trying to think of ways that they can set up a partnership/LLC and put in equal values in 2015 with my father in law able to take advantage of the 179 expensing/depreciation in 2014.

    Also, my father in law is nearing retiring age. We will want to start buying his 50% share out over time. If there is another entity besides an LLC that you would recommend?
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