U.S. · Tax forms
Form 1065 line 20, energy efficient commercial buildings.
The section 179D line: what Form 7205 does, who claims it, and the limits in the 2025 and 2026 instructions.
Line 20 (“Energy efficient commercial buildings deduction (attach Form 7205)”) is for the section 179D deduction. The partnership completes and attaches Form 7205 if it is claiming it, and the line feeds the deduction total on line 22.
Look up a 179D rule
Result
Section 179D rules from the instructions
| Topic | Meaning | What the IRS says |
|---|---|---|
| Line 20 and Form 7205 | Attach Form 7205 | Deduction for certain energy efficient commercial building property. Complete and attach Form 7205 if claiming this deduction |
| Qualifying property (EECBP) | Depreciable, in a U.S. building | Installed on or in a U.S. building, as part of interior lighting, heating, cooling, ventilation and hot water systems, or the building envelope, under a plan certified to cut energy and power costs by 25% or more against a Standard 90.1 reference building |
| Building owner | May claim | Check the Building owner box if you own the building and claim the deduction for qualifying property installed on or in it |
| Designer | Only for specified tax-exempt owners | The deduction can be allocated to the person primarily responsible for designing the property when the building is owned by a specified tax-exempt entity, with the owner’s written allocation |
| Certification | Qualified individual required | The certifier must be unrelated to the claimant and a properly licensed professional engineer or contractor in the building’s jurisdiction |
| 2025 maximum | Per square foot | For tax years beginning in 2025 the maximum is $0.58 per square foot at 25% energy savings, rising 2 cents per percentage point to $1.16 at 54% (indexed for inflation) |
| Prevailing wage and apprenticeship | Increased amount | Projects meeting these requirements multiply the dollar values by 5 (before inflation adjustments) |
| Basis | Reduced | If a deduction is allowed, the basis of the property is reduced by the amount of the deduction |
| Termination | Construction after June 30, 2026 | P.L. 119-21 terminated the deduction for property the construction of which begins after June 30, 2026 |
What line 20 does and does not do
The Form 1065 instructions are short: line 20 is the deduction for certain energy efficient commercial building property, with a pointer to the Instructions for Form 7205 and section 179D, and a requirement to attach Form 7205 if you claim it. All of the computation lives on Form 7205. The line amount is included in the total on line 22 (lines 9 through 21).
The 2026 numbers
For tax years beginning in 2026 the Form 7205 instructions give a maximum of $0.59 per square foot at 25% energy savings, increasing 2 cents per percentage point to $1.19 at 55% (indexed for inflation). They also say that the deduction is terminated for property the construction of which begins after June 30, 2026.
Heading wording
The line label on the form reads “Energy efficient commercial buildings deduction,” while the instructions heading reads “Energy Efficient Commercial Building Deduction.” Both refer to the same line 20.
Worked example
Maple Row Partners (made up) owns an office building and completes Form 7205 for a lighting and HVAC project. The computed section 179D deduction on Form 7205 is $18,500, so line 20 shows $18,500 and the partnership reduces the basis of the property by that amount. The $18,500 figure is invented; use Form 7205 to compute your own. Names and figures are made up.
More line pages in this set
Related lines: Form 1065 Line 21, Form 1065 Line 14, Form 1065 Line 9.
Sources
- Instructions for Form 1065 (2025): the line-by-line instructions on this page. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Form 1065 (2025), U.S. Return of Partnership Income: the printed line wording and arithmetic on the form (Form 1065 (2025), created 11/25/25). Read November 2, 2026.
- Instructions for Form 7205 (12/2025), Energy Efficient Commercial Buildings Deduction: who can claim the deduction, certification, the deduction ceiling and the termination date. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
Tax year 2025 forms and instructions: Form 1065 (2025) and its 2025 instructions. Line numbers and labels were read from the IRS PDF and instructions on the date read and can change between tax years, so check them against the form for your year. Names in worked examples are made up.
Frequently asked questions
What is Form 1065 line 20?
Line 20 is the energy efficient commercial buildings deduction under section 179D. The partnership attaches Form 7205 if it claims it.
Do I have to attach Form 7205?
Yes. The instructions say to complete and attach Form 7205 if claiming this deduction.
What is the 2025 maximum deduction?
For tax years beginning in 2025 the Form 7205 instructions give $0.58 per square foot at 25% energy savings, increasing at 2 cents per percentage point to $1.16 per square foot at 54% energy savings, indexed for inflation.
Does the deduction still exist?
The Form 7205 instructions say P.L. 119-21 terminated the section 179D deduction for property the construction of which begins after June 30, 2026.
Who can claim it for a tax-exempt building?
The deduction may be allocated to the designer if the owner is a specified tax-exempt entity and gives a written allocation. A person who merely installs, repairs or maintains the property is not a designer.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.