McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Federal Tax Incentives for Green Building Design and Construction Alternative Energy Tax Credits -Solar -Wind -Geothermal Energy Efficient Building Deductions (179D) -Owner -Designer Other Misc. Credits/Incentives

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Alternative Energy Property Tax Credits The American Recovery and Reinvestment Act of 2009 and the Energy Improvement Act of 2008 extended and expanded the credits for certain Alternative Energy Property:  Solar (30%)  Fuel Cells (30%)  Small Wind Turbines (30%)  Geothermal Systems (10%)  Microturbines (10%)  Combined Heat and Power Systems (10%)

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Alternative Energy Property Tax Credits (cont’d) Solar: 30% of expenditures for solar panels used to:  Generate Electricity  Heat/Cool  Provide Process Heat  Hybrid fiber-optic lighting systems Passive systems and pool-heating systems are not eligible

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Alternative Energy Property Tax Credits (cont’d) Small Wind Turbine: 30% of expenditures for small wind turbines:  No maximum credit for assets PIS after 12/31/2008  For property PIS between 10/3/2008 and 12/31/2008 a $4,000 maximum credit applies

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Alternative Energy Property Tax Credits (cont’d) Geothermal Systems: 10% of expenditures:  No maximum credit  Heat pumps and equipment used to produce, distribute or use energy from geothermal deposits

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Alternative Energy Property Tax Credits (cont’d) General Rules:  Currently these credits expire 12/31/2016  Most of the property eligible has a 5-year depreciable life for federal tax purposes

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Energy-Efficient Building Deduction The Energy Policy Act of 2005 allows a deduction for the cost of major energy-saving improvements or new construction. Placed in service after Dec. 31, 2005 and before Jan. 1, 2013 Pursuant to a certified plan to reduce energy costs Reduces energy cost by at least 50% in comparison to reference building (Standard ) Maximum deduction of $1.80 per square foot

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Energy-Efficient Building Deduction Partial deduction of up to $0.60 per square foot for each eligible building component Interior lighting system Heating, cooling, ventilation, and hot water systems Building envelope (windows, walls, foundations, slabs, ceiling, roof system, and insulation)

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Example $200 Million LEED office property in CA with $2.5 million in Solar Panels (100,000 sf) Eligible for $750,000 in Credits on Solar Panels $180,000 deduction under 179D $7 million savings due to accelerated Depreciation Solar Panels and Cost Segregation

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Other Tax Incentives State Credits Alternative Fueling Station Credits Bonus Depreciation

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Issues Complexity of qualifying Lack of Uniformity with other initiatives (LEED) Temporary nature of most credits/incentives

McGuire Sponsel, LLC s p e c i a l t y t a x s e r v i c e s Contact Information  David McGuire (317) – Direct (317) – Mobile