September 2020 • Volume 16 • Issue 9
EXPERT ADVICE
UNPRECEDENTED TAX BREAKS FOR UPGRADES BY DAVID FORMAN
replacements, when combined with NYSERDA and utility rebates or incentives, will have reduced equipment costs.
I have been in NYC through the entire pandemic, and staying focused on business is difficult but necessary. Business and real estate HOW CAN THESE TAX owners are no exception. CHANGES IMPACT YOUR Buildings need upgrades, HVAC BUSINESS? systems are old or failing, and local Aging or inefficient mechanical laws pertaining to the environment systems are one of the largest costs are nearing compliance dates, such to a facility and are often costly to as the Local Law 97’s Climate upgrade, retrofit or replace. AddiMobilization Act–Carbon Emis- tionally, with the current health sions Reduction crisis, extra expens2024 penalty date. es for cleaning and For a limited safety have absorbed time, your business any cash that was can take advanplanned for capital tage of an unprecimprovements. edented tax relief Building owners options available in Vanguard Building Solutions, are also considerthe 2020 Coronavi- LLC is a national provider of ing upgrading their multidiscipline building rus Aid, Relief, and HVAC systems to solutions and energy savings improve Economic Security indoor strategies. Founded in 2013, (CARES) Act. air quality through VBS has been working with Among those ben- all size organizations, helping supplemental air efits are advanced cleaning services them make building tax deductions for and technologies. improvements, save energy the cost of equipTaking advantage of and money, and reduce ment and system extra after-tax cash greenhouse gas emissions. components made flow and utilizing to the interior of a additional rebate building for qualified improvement programs for upgrading systems property (QIP) investments under can make the process easier and IRS tax code Section 168. less expensive. These upgrades can now be fully If cash flow is a concern, you can deducted for tax purposes, includ- finance the improvements and still ing HVAC, building controls, lighting, boilers, and other systems and components in the first year it is placed in service versus over a CONTINUED FROM PAGE 13 39-year period. For commercial buildings, the Even at 94 years old, Shulman cost of HVAC equipment and was involved in the politics and Building Automation Systems economic development of Queens. installed or upgraded in 2020 may Months prior to her death, she be fully deducted as a business endorsed Councilman Donovan expense, and can include costs Richards for borough president, incurred as far back as January 1, appearing with him at the Uni2018, with no limits on the cost of sphere at Flushing Meadowsequipment. Corona Park to announce her Qualifying expenses include support. He would later win the purchased systems as well as Democratic primary. components and labor costs, and Richards said she was an early qualifying buildings include non- supporter of his run, and said she residential or commercial buildings followed his career long before (excluding new construction). he knew it. She followed the race Your building Upgrades and closely, even sending him texts at
take advantage of the CARES Act’s 100 percent deduction. With these tax changes, upgrades, and improvements, the more energy-efficient systems may yield: • Increased return on investment for new capital expenditures; • Reduced payback period for capital investments; • Even deeper savings when combining these benefits with additional local energy incentive programs; • A depreciation bonus of 100 percent of the equipment and installation cost this calendar year; and • Energy and money savings on utilities and compliance with local laws. Many savvy building and business owners are looking ahead at the capital improvement scheduled in the future. They are accelerating the improvements into 2020 to take
advantage of the deduction, while using creative financing (interest rates are at an all-time low) for the funding. Finding the right team that can help you navigate and execute your HVAC and mechanical equipment, or system options is important.
7 a.m. on some days expressing her thoughts on the campaign. “I felt like I was her last big project,” he said. “I will cherish every moment.” The councilman said Shulman’s legacy lies in all of the institutions she helped build throughout Queens, from the Queens Museum and the Hall of Science to the Jamaica Cultural and Arts Learning Center and Roy Wilkins Park. “These institutions have stood from her tenure until now,” he said. “What she built led to the betterment of our borough.” Calling Shulman his “guardian
angel,” Richards can still recall the first meeting he ever had with her at her kitchen table. They sat and talked for almost five hours about her love for the borough, the institutions she built and what she hoped for the future. “She wanted someone to succeed in the seat she thought would build on her legacy,” Richards said. “I always said, ‘why me?’” Should he win in November, Richards said he wants to “get stuff done” just like his mentor and dear friend Claire Shulman. “I plan on getting plenty of shovels in the ground in my tenure,” he said.
Editor’s Note: Vanguard is not a tax advisor. Customers should always consult their tax experts and advisors in application of tax laws as it relates to their corporate or partnership structure and business operations. Each customer must assess its actual impact. David Forman is vice president of Vanguard Building Solutions. Learn more at vbs-energy.com.
REMEMBERING CLAIRE SHULMAN
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