NYC Brownfield Projects Now Eligible for IRS Tax Deduction

Section 198(a) of the Internal Revenue Code allows owners of qualified brownfield sites to deduct their cleanup costs in the year they are incurred. To qualify for this deduction, the owner must obtain a certification from the state where the site is located that the site qualifies as a brownfield.

The NYC Office of Environmental Remediation announced today that all sites that are remediated under the NYC brownfield program will be eligible for the IRS 198(a) deduction. Under an agreement with the NYS Department of Environmental Conservation, an owner who remediates a site under the NYC Brownfield program will receive the certification that it would have received if the cleanup had been done under state oversight.

Owners of NYC brownfield properties will be able to take the 198(a) deduction even if they receive a brownfield grant from NYC. The grant will be considered income for federal tax purposes and basically can be added to the cleanup costs for purposes of the deduction. More information is available from the NYC brownfield site on our Helpful Links page.

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