|The owner or tenant of a building in an Enterprise Zone which is at least 20 years old and has been completely vacant for at least two years can claim a tax credit of 25% of the cost of rehabilitating the building for commercial use. The credit is limited to $50,000 per building.
If the amount of the credit exceeds the amount of income taxes owed by the taxpayer, the remaining credit that is not claimed in a tax year, may be carried forward up to five years.
Qualifying Rehabilitation Expenditures
Expenditures associated with any exterior improvements, structural improvements, mechanical improvements, or electrical improvements necessary to rehabilitate a building for commercial use qualify for the credit.
Qualified expenditures include, but are not limited to: expenditures associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, sprinkler systems installed for fire protection purposes, roofing and flashing, exterior repair, cleaning, tuck pointing and cleanup.
Non-Qualifying Rehabilitation Expenditures
Qualified expenditures do not include: expenditures commonly referred to as soft costs, which include, but are not limited to, costs associated with appraisals; architectural, engineering, and interior design fees; legal, accounting, and realtor fees; loan fees; sales and marketing; closing; building permit, use, and inspection fees; bids; insurance; project signs and phones; temporary power; bid bonds; copying; and rent loss during construction. Qualified expenditures also do not include: costs associated with acquisition; interior furnishings; new additions except if it is required to comply with building and safety codes; excavation; grading; paving; landscaping; and repairs to outbuildings.
For more information see the Colorado Department of Revenue References FYI Income 24.