Code section · 2005
IRC §45L
26 U.S.C. §45L, as amended by P.L. 119-21 §70508 (adding §45L(h)); Notice 2023-65; Form 8908
Internal Revenue Code
What it holds
A credit for the eligible contractor (the builder, or the producer of a manufactured home) for a qualified new energy efficient home acquired for use as a residence. For homes acquired 2023 through June 30, 2026: single-family or manufactured, $2,500 (Energy Star) or $5,000 (Zero Energy Ready Home); multifamily, $500 or $1,000, rising to $2,500 or $5,000 when prevailing wages are paid (§45L(g)). The credit does not apply to any home acquired after June 30, 2026 (§45L(h)). The acquisition date controls, not the construction date. Depreciable basis is reduced by the credit (§45L(e); §1016(a)(32)), except for §42 eligible basis. Expenditures counted for the §47 or §48(a) credit cannot also count for §45L (§45L(f)).
Why it matters for your study: Developers who build and lease. Reduce depreciable basis by the credit before allocating. Assign the reduction to the building (the credit is earned per dwelling unit for envelope and HVAC work, which is structural), and state the method in the study. For units sold, the homes are inventory and there is nothing to study.
- Category
- Methodology & procedure
- Applies to
- All property types
- Status
- Vetted
This page explains a tax authority in plain words. It is not tax advice for your situation. Joel Salas, our Director of Tax, signs every study. Citation is provided so you or your advisor can read the primary source.