J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

Capital Construction-Related Credits

The tax law encourages certain types of construction.

DISABLED ACCESS CREDIT

If you make capital improvements to make your premises more accessible to the handicapped, you may qualify for a credit of 50% of expenditures over $250, but not over $10,250. Thus, the top credit is $5,000. If you claim this credit, you cannot claim depreciation on these costs.

LOW-INCOME HOUSING CREDIT

If you invest in the construction or rehabilitation of housing for low-income individuals, you may be eligible for a tax credit of 70% of new construction or 30% of federally subsidized buildings. The credit is claimed over a 10-year period.

REHABILITATION CREDIT

If you rehabilitate or reconstruct certain buildings, you may claim a credit of 10% of your costs if the building was originally placed in service before 1936. If the building is a certified historic structure listed on the National Register of Historic Places, the credit is 20% of your expenditures. To qualify, your expenditures must be more than the greater of $5,000 or your adjusted basis in the building and its structural components.

NEW MARKETS CREDIT

This credit expired at the end of 2011. If extended, then the following information applies for 2012. To encourage investments in certain economically disadvantaged areas, you may claim a credit for purchasing stock in a community development entity (CDE). A CDE is a domestic corporation or partnership that provides investment capital for low-income communities ...