HR 5771, the Tax Increase Prevention Act of 2014 (better known as the tax extenders bill) was signed into law by President Obama on December 19, retroactively extending many tax benefits that had previously expired at the end of 2013. However, it should be noted that the bill itself expires on December 31, 2014, so its provisions only apply to the 2014 tax year.

Of the approximately 50 tax extensions included in the bill, real estate counsel interested in green buildings and renewable energy projects should consider the following of importance:

The 179D deduction provides a significant federal tax deduction for energy efficient commercial buildings placed in service after December 31, 2013. It allows building owners and tenants that expend funds to make a commercial building more energy efficient to claim an immediate one-time depreciation deduction of up to $1.80 per square foot. Energy efficiency is measured based on the building envelope, HVAC systems and lighting. Most importantly, business owners financing green equipment should consider applying for Section 179 Qualified Financing as soon as possible to make the cut-off and take advantage of this extension.

Section 155 of HR 5771 extends the production tax credit for certain types of renewable energy, such as wind, biomass, geothermal, landfill, hydroelectric and hydrokinetic. The amount of the credit is based on the type of renewable resource and is earned on a per kilowatt hour basis ranging from 1.1¢/kWh to 2.3¢/kWh. The credit typically lasts for 10 years after the date the facility is placed in service with limited exceptions.

For wind energy facilities, the extension continues to allow a developer to elect whether to claim the production tax credit or the 30% investment tax credit. One of the main benefits of the production tax credit is that a project must only start construction before January 1, 2015, while for the investment tax credit the project must be "placed in service" by December 31, 2016 (see Legal Update, Solar Energy Tax Credit Problems Arise as Deadline Looms).