179D Is Not Dead: Claim It on a Building You Have Owned for Years

David Wiener: Five dollars ninety four cents a square foot. That's the top end of the 179D deduction on a building placed in service this year. On a hundred thousand square foot building, that's north of half a million dollars off taxable income for making the building more efficient than a twenty nineteen code book. And on june thirtieth of this year, that deduction officially started dying, which is why this week somebody's gonna probably tell you it's dead. They're wrong. The building you already own, the one you finished in 2019 and never claimed a dime on, still qualifies. The project you poured a slab on in May still qualifies. The deadline that passed has nothing to do with either one. Today I'm going to show you both doors and exactly how to walk through them. Welcome back to the Tax Strategy Playbook. I'm David Wiener Some of you know me as Mr. Cashflow. I've spent my career helping real estate investors, business owners, and tax professionals who serve them keep more of what they legally earn on purpose with a plan instead of a shrug. Today's a solo show and it's a sequel. Back in episode eight, Brian Broussard and I spent an hour on the 179D deduction, what it is, who gets it, and the June 30th, 2026 cutoff that was still two months away when we recorded. That episode was built to get you in the door before the deadline. This one's built for the day after. Because the deadline came and went. And I've spent the summer answering the same questions from owners, developers, and architects. Is it over? Short answer, no. The 179D deduction, the energy efficient commercial building deduction, is closed for new projects that start construction from July 1, 2026 forward. It's wide open for two groups of people, and those two groups are most of the people who ever qualified for it in the first place. Owners of commercial buildings that are already standing, and anybody whose project started before the cutoff, no matter when it finishes. So this one's built for three people. The building owner or an investor who owns a commercial building, a warehouse, an office, a hotel, a self-storage facility, an apartment building four stories or taller. And has never claimed 179D on it or renovated it and never claimed the renovation. The developer or owner with a project that was underway this spring and is going to be finished sometime in the next few years, and the architects, engineers, and design build contractors who design buildings for schools, cities, hospitals, churches, and universities, because there's a version of this deduction that belongs to you. And it runs on a different clock than everybody else's. Tax professionals follow along. I'll take your side about halfway through because this deduction lands on your desk with a form you may have never seen and an engineering requirement that nobody warned you about. Quick heads up before we really get rolling with this. Stay with me into the back half because I'm gonna put numbers on three real kinds of buildings. A warehouse built in 2019 that never claimed anything. A medical building that replaced its lighting and HVAC in twenty twenty four, and a hotel that broke ground in May. Same deduction, three very different checks. And I'm going to name the one document that decides whether a half built project made the cutoff or missed it entirely. If you only catch the first 15 minutes, you'll know the deduction's alive, and you won't know whether yours is. So let me lay the foundation because everything else after it depends on this. Here's what 179D deduction actually pays for. 179D is a section of the tax code that pays you for owning a building that uses less energy than the code minimum. That's the whole idea. Congress wrote it in 2005. It took effect in 2006, and it's been rewritten a few times since, but the bones haven't changed. Three things about it before we go really anywhere. First, it's a deduction, not a credit. Credit comes straight off your tax bill. A deduction comes off the income you pay tax on. So $100,000 $179D deduction is worth whatever your tax rate is times $100,000. In the top bracket, call it $37,000 of tax and more once your state's added in. Second, it's measured by the square foot, not by what you spent, not by what you saved on the power bill. The building's floor area times a dollar figure the law sets. And that dollar figure depends on the year the building or the improvement was placed in service and how efficient it is. I'll give you the actual numbers by year in a few minutes because they've moved around a lot and the year matters more than most owners realize. Third, it's about systems, three of them, and only three. The lighting, the heating, cooling, and hot water, and the envelope. Which is the roof, the walls, the windows, the doors, everything that separates inside from outside. An engineer builds a model of your building in software the Department of Energy has approved, then builds a second model of the same building the way the code minimum would have built it, and compares the energy cost. If yours beats the reference building by enough, you qualify. Brian said something in episode eight that's worth repeating. The reference standard for most buildings is an addition of the engineering code from years ago, and LED lighting isn't even in it. Beating it's not hard, it's math, not opinion. Who gets it? Two kinds of people. The owner of the building, if the owner pays tax, or if the building is owned by somebody who doesn't pay tax, a city, a school district, a state university, a hospital that's nonprofit, a church, a tribal government, The deduction can actually be handed to the person who designed the energy efficient systems. That's the designer allocation. And it has its own section later because it's the one most people miss most. And what kind of building does this affect? Commercial, office, retail, industrial, warehouse, hotel, self-storage, medical, restaurant, and residential buildings of four stories or more because the code treats those as commercial. Your duplex can't qualify. Your six-story apartment building does. One more piece of vocabulary to cover with you. The deduction gets claimed on a form called Form 7205. It's short. What sits behind it isn't, and that's a certification. A licensed engineer or contractor in the state where the building sits has to inspect the building in person and sign off that the modeling is right. Brian's engineer in Houston gets on a plane. That's not a formality. It's the thing that makes the deduction hold up. Now, if you listened to episode 8, sorry, none of that was new. Here's what is. Let me tell you exactly what the law killed on June 30th, because the rumor is bigger than the rule. The One Big Beautiful Bill Act signed July 4th of 2025 ended a long list of energy incentives, and it ended 179D with one sentence. The deduction doesn't apply to any property, the construction of which begins after june thirtieth, twenty twenty six. Read that again because every word is important. Property, the construction of which begins after june thirtieth. Not property placed in service after june thirtieth, not deductions claimed after june thirtieth, construction that begins after. So here's what died. A building nobody had started by the end of June. If you're breaking ground on a new office building in October or September of 2026, there's no 179D deduction for you. That's the whole loss. Here's what didn't die. And I want to say this very plainly because I've watched three different podcasts get it wrong over the summer. The myth is 179D is over. If you didn't claim it by June 30th, it's gone. That's not what the law says. Two things are completely untouched. One, every commercial building that was already placed in service before the cutoff, there are millions of them. The law didn't reach back and revoke a deduction on a building finished in 2019. Nothing about the termination touches property that already exists. If you own a building that qualified last year, it still qualifies this year. And the mechanism for claiming it on a building you've owned for a while is the same one it was before. I'll walk through it with you a little bit later in the in the show. Two, every project that began construction before July 1st of 2026, no matter when it finishes. Brian said this in episode eight, and it's still exactly right. If you started in May of 2026 and you finish in 2028, you're in. The law tested the start date, not the finish line. And there's a cousin to 179D that died the same day. I'll mention it once because some of you build houses. Section 45L, the credit for new energy efficient homes, ended for homes acquired after June 30th, 2026. Different section, different rule, same date. If you're a home builder and you closed homes in the first half of the year, ask about 45L. That's about all I'm going to say for it on this show. So the honest picture as of this week. The pipeline of new projects is closed. The stock of existing buildings and everything already in motion is wide open. And the stock is enormous and most of it hasn't ever been touched. Let me take a quick break here before I walk through the first door. If you'd rather have this land in your inbox than to have to remember to come back for it, go to taxstrategyplaybook.com/slash newsletter and subscribe. It's free and it gives you access to my 2026 tax planning guide and the playbook notes for every episode of the Tax Strategy Playbook at no charge. The playbook notes for this one will have the rates by year and the two paths written out. So you can hand them to whoever prepares your tax return. Okay, door number one, the project that was already moving when the clock ran out. If you had a project underway this spring, and the entire question is whether construction began by June 30th, and began is a term of art. So let's be careful with it. Brian gave us the practical test in episode eight, and it's the one the industry has been using. Construction begins when physical work on the building itself starts. Think the slab, the foundation, the structural work, not clearing the lot or drawing plans, or alternatively when you've incurred at least 5% of the total project cost, either one. And the work has to be continuous after that. You can't pour a footing in June, walk away for a year and come back to claim you started. I want to flag something here too because I'd rather have you hear it from me than get surprised. The IRS has published detailed rules on what beginning of construction means for energy incentives. And that's where the physical work test and the 5% test come from. As I'm recording this, I haven't found guidance written specifically for the 179D cutoff. The industry, CSSI included, is reading it the way the IRS has always defined the phrase. That's a reasonable reading and it's the one I'd plan around. But it means the facts of your project matter, and the proof of those facts matters even more. Which brings me to the one document I told you about. If your project was in motion this spring, The thing that decides whether you qualify is a dated record showing what happened before july first. A construction contract with a start date, permits pulled, invoices for foundation work, dated photos of the site, a deposit on the HVAC system or the chiller that clears the 5% line. Get that file together now, while the people who can produce it still work for the contractor. Not in 2028 when the building opens and somebody asks. Now the rates. Because a project that started in time is going to be placed in service under the current rules, and the current rules are the richest version of this deduction that's ever existed if you hit the labor requirements. Here's how it works for anything placed in service from 2023 on. The floor is 25% energy savings against the reference building. At 25%, you get a base deduction. And for every percentage point above 25%, the deduction goes up by two cents a foot until you hit 50% savings where it maxes out. The base numbers get adjusted for inflation every year. For twenty twenty-six that's fifty-nine cents a square foot at twenty-five percent, up to a dollar nineteen at fifty percent. Then there's the multiplier. If the project paid prevailing wages and used registered apprentices, the whole scale goes up roughly five times. For 2026, that's $2.97 at the floor, up to $5.94 a square foot at the top. that's the number from my opening. And that's why a hundred thousand foot building can produce more than half a million dollars of deduction. Whether you hit the labor rules is a question about how the job was run, not something you can go back and fix afterward. A lot of privately financed projects didn't. A lot of publicly funded ones did because prevailing wage was already a condition of the contract. If you're a designer working on government buildings, pay attention to that because it's why the designer allocation got so much bigger after 2022. One more thing on the current rules, and it's the yardstick. For projects that began construction in 2023 or later, the reference building is generally built to the 2019 edition of the engineering standard Ashray 90.1. For older projects, it's the 2007 edition. Newer yardstick. Harder to beat, which is why the 25% floor exists. Your engineer picks the right addition based on your dates, you don't have to. And a cap I want you to know about. On a renovation, the deduction can't exceed what you spent on the improvements. Brian's only ever hit it once on a very large building where the deduction came out bigger than the $4 million renovation. On new construction, the cap is the cost of the system, and you'll basically never touch it. That's the project that started in time. Now, door two, and this is the bigger one, because it applies to buildings you already own. Here's the sentence that surprises almost every owner I talk to. If you own a commercial building that was placed in service anytime since 2006, and it qualifies for 179D, and you never claimed it, you can claim it now on your current return without amending anything. That's not a loophole. It's the same procedure I spent all of episode 27 on for cost segregation. It's called a change in accounting method. And for building owners, the IRS put 179D on the list of changes it pre-approves. The revenue procedure that did it is 2012-39, and the change carries designated change number 152. Your tax professional files form 3115, the application for change in accounting method with your return. and writes 152 on it, and the deduction you were always entitled to lands on this year's return. No user fee, no waiting on the IRS, no reopening 2029. If you listen to episode 27, you already know the machinery and I won't reteach it. The one line version, a deduction you were entitled to and never took isn't a mistake that you fix by amending. It's a method you change. The whole catch up shows on the current return as one number. Two things the IRS is specific about, and I'll be specific about it too. This route is for building owners, not designers. A court case settled that. A designer who gets the deduction allocated from a school district isn't depreciating the building. So there's no method to change. Designers amend, owners file the 3115 We'll get to designers in the next section. And this route is for buildings where 179D was never claimed. If you claimed it in 2019, you can't come back and claim it again on the same property for the same work. There is, since 2023, a rule that lets a building claim 179D again after three years if new qualifying work goes in, four years if the deduction was allocated. But that's for new improvements, not a second bite at the same ones. Now the part that decides the size of your check. The rate depends on the year the building or the improvement was placed in service, not the year you file. So here's the history. From 2006 through 2020, a building that beat the reference standard by 50% got $1.80 a square foot. Flat. If it only got partway, there was a partial deduction of 60 cents a square foot for each of the three systems that qualified on its own lighting, HVAC, or envelope. 2021 nudged the full amount to $1.82, 2022 to $1.88. Then 2023 rewrote it into the sliding scale I described a few minutes ago. The floor dropped to 25% savings, the base dropped to roughly $1 at the top of the scale, and the five times multiplier for prevailing wage and apprenticeship arrived. At the top of the base scale, that's $1.7 for 2023, $1.13 for 2024. $1.16 for 2025 and $1.19 for 2026. And if the labor rules were met, five times those. So the punchline for owners a building placed in service before 2023 is sitting on $1.80 a foot roughly at 50% savings, and 50% against a 2007 code book is a threshold a modern building clears without even trying. A building placed in service in 2023 or later is on the sliding scale, and unless the job paid prevailing wage, the number's smaller per foot. Neither one's bad, but if you own a warehouse from 2018 and a warehouse from 2024, the older one's probably worth more per square foot under this deduction. That surprises people. There's a third door inside this one and it's for renovations. Since twenty twenty three, there's an alternative path for buildings that are at least five years old and get retrofitted. Instead of modeling energy costs against a reference building, you measure the building's actual energy use intensity before and after the retrofit, and if it dropped by twenty five percent or more under our written qualified retrofit plan, You qualify. It's newer. It takes a plan written before the work starts, and it's the right tool for an older building where the modeling route doesn't pencil. Ask about it if you've got a renovation coming up on a building you've owned for a while. And remember, a renovation that started before July 1st still qualifies. One that starts now doesn't. Two cautions on the owner side, both from the code. The deduction reduces your basis in the building. You got the write-off early. So there's less to depreciate later, and it can show up at sale. Brian mentioned in episode 8 that the designers don't carry that, owners do. Know the exit before you take the deductions, which is the same thing I'd tell you about cost segregation. And second, the certification is real. A licensed professional visits the building. No visit, no deduction. If someone offers you a 179D study from a desk, that's not a 179D study. Now here's the part that makes the owner's door so wide. Brian said it in episode 8, and it's still true. A 179D and a cost segregation study pull from two different piles. Cost segregation moves the five, seven, and fifteen year components. 179D reaches into the 39 year structure, the envelope, the mechanical systems that cost SEG can't really touch. Same building, same site visit. Two deductions. And if you're doing a look back study for cost segregation on a building anyway, ask whether the 179D change goes on the same form 3115. Brian told me that the IRS combined them a few years ago. I'll flag that as something your tax professional confirms against the current list of automatic changes, because that list gets reissued every year, and I want the number on your form to be the current one. So which of your buildings do you look at first? Let me give you the triage for that because most owners have more than one and they always start with the wrong one. Three things decide where the money is, and they're in this order. Square footage first. The deduction is per square foot, and the study has a fixed cost, so a big plain warehouse beats a small fancy office every time. Brian's practical line is about 40,000 square feet for a single building. Below that, the study can eat the deduction. But he also said something in episode eight that most owners miss. Buildings can be grouped. So three 25,000 foot self-storage buildings on the same site or four smaller office buildings in the same city can share one site visit and one engineer's trip, even though it each gets its own study. If you've got a portfolio of smaller buildings in one market, that's a group, not a list of rejects. Second thing is year placed in service. Pre-2023 buildings sit on a flat dollar eighty scale and get measured against the 2007 code. That's the sweet spot. A modern modern building measured against an old yardstick. A 2012 office with LED retrofits and a decent roof will model at 50% without a whole lot of drama. Buildings from 2023 are on the sliding scale against a newer yardstick, and unless the labor rules were met, the per foot number's smaller. So if you own a 2015 warehouse and a 2024 warehouse, start with the 2015. Third is use. Hotels, self-storage, distribution, medical. Cold storage and anything with heavy lighting and mechanical load tends to model pretty well, because the systems are a bigger share of the building. A hotel's the classic. Brian said the self-storage industry has its own version of this pitch. Do a cost seg and a 179D on the facility and the tax saved over three years is a down payment on the next one. Two myths that keep owners from ever making a list, and I hear both of them all the time. Myth one, my building isn't a green building, it's not LEED certified, it's not solar, it's just a building. None of that is the test. LEED is a private rating system and the tax code doesn't mention it. Solar is a different section entirely. 179D asks one question. Does the modeled energy cost of your lighting, HVAC, and envelope beat a reference building built to the code minimum by enough? A standard issue tilt wall warehouse with LEDs and a white roof answers yes. You don't need a plaque on the wall. You need an engineer with the right software. Myth number two is it's an old building, so it won't hit the threshold. That's backwards. The older the building, the older the yardstick it's measured against. A building placed in service in twenty fourteen is measured against the 2007 standards. A standard written before LED lighting was common and before rooftop units got as efficient as they are now. So if that building had a lighting retrofit or a new mechanical system in the last ten years, and most have, it's likely over the line. Old isn't the problem. The problem is never having asked. If you take one thing from this section, make the list by square footage, sort it by year, and put the biggest pre-2023 building at the top, that's your first phone call. Which brings me to the group with the shortest clock and the biggest blind spot, the designers. If you're an architect, an engineer, or a design build contractor, and you've designed a school, a courthouse, a public university building, a VA clinic, a church, A nonprofit hospital or anything owned by a tribal government in the last three years, this section is for you. The building's owner can't use a 179D deduction because they don't pay income tax. So the law lets them allocate it. The owner signs a letter assigning the deductions to the person primarily responsible for designing the energy efficient systems. Before 2023, this only worked for government buildings. Since 2023, it works for any of those specified tax exempt owners, which roughly tripled the universe of buildings a designer can be allocated. Three things make the designer's version different from the owners, and each one matters. First is the clock. Designers can't use the Form 3115 route. The court case I mentioned is called Canon Corporation, and the tax court and then the Second Circuit said a designer isn't depreciating anything. So there's no accounting method to change. Designers claim it on the return for the year the building was placed in service. And if that year's already been filed, they amend. And amended returns run on the ordinary refund statute, roughly three years from when you filed. So a designer's look back is three years. An owner is effectively 20. If you're a firm that's been designing schools since 2010, the ones from 2010 are gone. The ones from 2023 aren't. Move. Second is the money. Government and institutional work is where prevailing wage already lives because it's usually a condition of the contract. That means designer allocations on the 2023 and later buildings are the ones most likely to land on the five times scale. A designer with a hundred fifty thousand square foot high school placed in service in twenty twenty five, prevailing wage met, is looking at something between two dollars ninety and five dollars eighty a square foot, depending on the modeled savings. That's a deduction that can run from four hundred thousand to over eight hundred thousand dollars. Brian told me in episode eight that a hundred and fifty thousand foot building could land anywhere from one hundred seventy thousand on the low end. To over 850,000 at the top of the labor scale. Same math. Third is the letter. The allocation only exists if the owner signs it, and an owner can only give it away once. Brian's team asks the school district or the agency up front whether the deduction's still available, because if the mechanical engineers firm already got it, the architect's out. First to ask, first to get. That's not a rule I love, but it's the rule. And one more that's good news. Designers don't reduce basis because they don't own the building. The deduction carries forward until it's used, and there's nothing waiting at a sale because there's no sale. Of all the versions of 179D, the designer's is the cleanest, and it's the one fewest people claim. So who pays for the study? Well, the designer does, because the designer's the one who benefits the design. And the owner really has no reason to pay for the study. That's a conversation to have with your firm's partners this quarter, not the next spring, because every month that passes moves another building from inside the three-year window to outside the three-year window. Okay, that's enough theory. Let's put numbers on the three buildings. So everything that follows from here is an illustration that I built to show the mechanics. None of these are clients, and the numbers will be your own. Let's look at building number one, a 60,000 square foot distribution warehouse, built and placed in service in 2019 by a built business owner who runs the company out of it. Standard construction, LED lighting, a modern rooftop HVAC package, insulated metal panels. Never claimed 179D because nobody ever told him about it. Depreciating on 39 years like every other warehouse. 2019 means the old rules. 50% savings against a 2007 reference standard, $1.80 a square foot. An engineer models it and a 2019 warehouse with LEDs and a decent envelope clears fifty percent. Sixty thousand feet times a dollar eighty. That one hundred and eight thousand dollars goes on the owner's twenty twenty six return through Form thirty one hundred fifteen, change number one hundred fifty two as a catch up. One number? One year. For an owner in the top bracket who's actively running the business in that building. That's roughly forty thousand dollars of federal tax, more with state. And the same site visit can produce a cost segregation study on the five, seven, and fifteen year components the warehouse has been carrying at 39 years since 2019, which is a second catch up on the same return. I walked that arithmetic in episode 27. So if you're interested, go back and watch that episode. In fact, go back and watch that episode anyway. It was a pretty good one. Here I'll just say The two things together on a 2019 warehouse are usually the largest single deduction the owner has ever taken on his taxes. Building number two, a 45,000 square foot medical office building. The owner replaced the lighting in the entire HVAC in 2024. $600,000 of work. The contractor was a private firm, no prevailing wage, no apprentices, placed in service in 2024. 2024 means sliding scale, base rates only. The improvements get modeled against the reference building and say that the new systems get the building to 50% savings. That's the top of the base scale for 2024, $1.13 a foot. $45,000 times $1.13, $50,850. Under the $600,000 cost of the work so the cap doesn't bite. Now, if that same job had been run with prevailing wage and apprentices, the rate would have been about five times that. Call it $5.65 a foot. And the deduction would have been a bit over $2,000, $50,000. Same building, same equipment. The only thing that changed is how the contractor's payroll was run. That's why I keep saying the labor rules aren't something to fix later. They're something to know before you sign the contract if you ever sign another one. And this owner's 2024 work was placed in service two years before the cutoff. It qualifies. It goes on the 3115 the same way the warehouse does. Building three, an 80,000 square foot hotel. Slab poured in May of 2026, six weeks before the deadline. Opens in late 2027. The developer has the construction contract, the permits, the founding invoices, and a photo with the poor of the pour with the date on it. That's the file. The hotels placed in service in 2027, so the 2027 rates apply. And those haven't been published yet as I record this. So we'll use 2026 as a stand-in. If the hotel models at 50% and the job didn't meet the labor rules, that's $1.19 a foot, $95,200. If it did meet them, $5.94 a foot, $475,200. on one hotel. Plus the cost segregation study a hotel always deserves because hotels are packed with short life property. And one more because I promised the designers a number. An architecture firm designed a hundred and twenty thousand square foot elementary school for a public district placed in service in 2024. Public job, so prevailing wage and apprenticeship requirements were already in the contract. The district signs the allocation letter to the firm The building models at 40% savings, 15 points above the floor. On the twenty twenty four prevailing wage scale, that's about two dollars eighty three at the floor plus twelve cents for each point above it. Call it four dollars sixty three cents a foot. 120,000 times four sixty-three, roughly five hundred fifty five thousand dollars of deduction to a firm that owns no building and reduces no bases. On a twenty twenty four return I can still amend. That's a partner meeting number, and the one nobody in the firm has heard of. And here's the sentence I want you to hear about building three. That hotel is being built after the cutoff. It's being finished after the cutoff. It's being placed in service more than a year after the cutoff and it qualifies. Because the slab went in on time and the developer can prove it. One ask before I move on, and it isn't about you. Think of a specific person. Somebody who owns the building their business runs out of, or an investor with an office or a warehouse they finished years ago, or the architect you know who does schoolwork and has never once mentioned this deduction. Every year they assume it doesn't apply or that it's over, it costs them a check like one of those three. Send them this episode, by name, today. Now let me take the tax professional side for a minute because this is the deduction they get blamed for. And it is not their fault. If your tax professional never brought up 179D, I want you to understand why, because it's not what you think. Cost segregation, they've usually heard of. 179D is a different animal. It requires an engineer licensed in the state where the building sits to model the building in software the Department of Energy approved, compare it to a reference building nobody's ever seen. Visit the site in person and sign a certification. Then it lands on form seventy two five, a form most preparers have never filed. And if it's a look back, it also needs form 3115 with the right change number, the method descriptions, and the catch up computation in filing season when there isn't an hour to spare. Brian said it in episode eight. Some preparers will try to do a cost segregation study on their own. It's not a good idea, but they do. Nobody tries to do a 179D study on their own because you can't. It needs the engineer, it needs the seal. So what happens is exactly what happens with the cost seg look back I described in episode 27. Nobody says no. It becomes next year's problem, and next year is March again. Here's how it gets removed. The study firm does the modeling, sends the engineer, and produces the certification. And on a look back, the deliverable can include a draft of the completed 3115, change number in place, methods description written, catch up computed and tied to the study, so that your tax professional is reviewing a finished draft instead of building one from a blank form in an engineering report. That's the same thing CSSI does on a cost segregation look back by their own account, and the reason is the same. The friction was never the client's interest. It was the paperwork. Take the paperwork off the pile and the conversation moves. So if you ask about a 179D and hear some version of, let's look at that after the deadline, that's not a no. It's a preparer with 40 clients in a form they've never seen. Say out loud that the study comes with the modeling, the certification, and a draft 3115, and then watch what happens. Let me run some questions that I actually get asked out loud. Short answers, no hedging. First, is 179D dead? No. It's closed for projects that began construction after June 30th, 2026. Every building already in service and every project still underway still qualifies. Number two, my building is 15 years old. Too late? Building owners can catch up 179D on a current return through Form 3115 for any building placed in service since 2006, as long as it was never claimed. Next, I'm an architect. Same answer? No. Designers amend, they don't file a Form 3115. So your window is roughly three years back from the return you filed. How big does the building have to be? There's no legal minimum. Brian's practical line is about 40,000 square feet because the study has fixed costs. Smaller buildings in the same area can be grouped under one site visit. Does an apartment building qualify? If it's four stories or taller, yes. Under four, no. That's a commercial building rule, not a rental rule. How about a renovation? Does that count? Yes, if it's touched lighting, HVAC or hot water or the envelope, and it was placed in service before the cutoff or started before it, renovations are capped at what you spent. I did the work, but I didn't pay it prevailing wage. Do I still qualify? Yes. You get the base scale instead of the five times scale. Base rates for 2026 run from 59 cents to $1.19 a foot. Can I claim it and cost segregation on the same building? Absolutely, it's a great idea. They pull from different piles, and one site visit can produce both. Does it reduce my basis? For owners, yes. For designers, no. Can I claim it twice on the same building? On new qualifying work after three years, yes, since 2023. On the same work, no. What if the school already allocated it to somebody else? Then it's gone for that building. First to ask, first to get, ask now. And I the one I hear all the time is: what does the study cost? It depends on the square footage, location, and complexity. And it's quoted before you commit. I can provide you a free estimate, and it comes first. Does my building need to be LEED certified or have solar? No. Neither is in the code. The test is modeled energy cost of lighting, HVAC, and envelope against a reference building. What if I lease the building to a tenant? The deduction belongs to whoever owns and depreciates the qualifying property. Usually that's the landlord. If the tenant paid for and owns the improvements, that's a question for your tax professional, and the answer can actually go either way. What do I need to get started? Square footage, the year the building or the improvements were placed in service, and the address. No plans yet. We can get a proposal for you out from those three things. My project started in June. What proves it? A dated construction contract, permits, invoices for physical work on the building, dated photos, or a deposit that clears 5% of the project cost. Build that file this month. Okay. So let's make this something that you can act on. Here's your playbook. Five steps, and you can get through the first four of them this week. Step one, list every commercial building you own with two numbers next to each, the square footage and the year it was placed in service. If it's a residential building, number note the number of stories. Anything four stories or more, or any commercial buildings at all placed in service since 2006 is a candidate. Don't filter yet, just list. Step two. For each building, write down every renovation that touched lighting, heating, and cooling, hot water, the roof, the walls, the windows, or the doors, with the year the work was finished and roughly what it costs. Those are separate 179D events with their own placed in service years and their own rates, and they don't require the whole building to qualify. Step three. If you had anything under construction this spring, build the proof of start file now. Contracts, permits, invoices for physical work, dated photos, and any deposit that clears 5% of the project cost, all showing activity before July 1 of 2026. Put it in one folder with the date on the folder. This is the step nobody does until it's too late to do it. Step four. If you design buildings, Pull the list of every project for a government, school, university, hospital, church, or tribal owner that was placed in service in the last three years. Then call the owner's facilities contact and ask one question. Has the 179D deduction on this building been allocated to anyone? You want that answer before another firm asks. Step five, get an estimate before you commit to anything. Square footage. You're placed in service, address. That's enough for a proposal that tells you what the study costs and what the deduction looks like. Not a guess, an actual number, and then you take it to your tax professional along with the news that the 3115 draft can come with it. That last step is the one that I want to help you with directly. I work with CSSI and Brian's team runs our seven 179D practice. I'll get you a no-cost analysis on any building you own, any project you've got in motion, or any allocation you might be entitled to as a designer. No obligation, no sales pitch. And here's the part I want you to hold me to. If your building is too small or the numbers don't clear the cost of the study, I'll tell you that. I'd rather give you a straight no on a 12,000-foot building and hear from you again when you buy the next one than sell you a study that doesn't pay for itself. You can book that conversation with me at calendly.com/david-wiener/cs The links in the show notes. Or you can call me directly at 770-224-8504 option two. Nothing in this episode is tax advice for your situation, because your facts are your facts, and they need a professional who knows them. What I can do is make sure you walk into that conversation knowing exactly what to ask for. The two doors. The year your building went into service, and the file that proves when your project started. Remember, tax evasion is a crime, but tax avoidance is mandatory. Congress closed the front door on 179D and left the building you already own standing right where it was with a deduction still in it. I'm David Wiener, Mr. Cashflow, and I'll see you next Tuesday on the Tax Strategy Playbook.