LEED Defined

• The U.S. Green Building Council (USGBC) developed LEED to provide a framework that builders, companies and homeowners can use in their developments. LEED standards provide environmental solutions for the construction, maintenance and operation of buildings. Examples include efficient use of building materials and building projects that use less energy. LEED applies to interior and exterior commercial and residential projects, both new and renovative. The standard was implemented in March 2000.
  
  

Home Energy Credit

• Homeowners whose projects meet LEED standards can qualify for the home energy efficiency improvement tax credit. It provides a 30 percent rebate for existing homes for up to $1,500. According to the USGBC, this credit is helpful to those who are renovating their properties if they are using energy savings equipment.
  
  

Renewable Energy Credit

• Called the residential renewable energy tax credit, this tax benefit provides a credit of up to 30 percent to taxpayers who install renewable energy systems. These can include those for wind, solar and fuel cells. Geothermal HVAC systems that are installed may also be eligible for this credit. USGBC points out that the cost of these HVAC systems has decreased in recent years making this credit even more valuable because the credit lowers the return on the investment for installing the system.
  
  

IRS Deductions

• LEED standards can lead to Internal Revenue Service deductions if they comply with the agency’s energy regulations. The IRS allows deductions to taxpayers who operate energy efficient commercial buildings. This includes installing interior lighting, heating, cooling, ventilation and hot water systems that reduce the total annual energy and power costs by 50 percent. The amount of the deduction is based on a variety of factors, including the square footage of the building and the amount of energy cost savings.
  
  

Tax Advice

• LEED tax credits have varying expiration dates. For example, some expire five years after they are made available. Also, some of the tax credits may not expire, but may be renewable for lower amounts. Individual tax situations can also dictate the amount of any credits or deductions a taxpayer may be entitled to receive. For these reasons, taxpayers should consult with a tax professional to get advice about how, if at all, LEED can be tax advantageous.