“The past is not the property of historians; it is a public possession. It belongs to anyone who is aware of it, and it grows by being shared. It sustains the whole society, which always needs the identity that only the past can give.” – William J. Murtagh

You might have guessed by now, but we’re passionate about the preservation of our built history.

Old buildings aren’t just interesting to look at, they serve as the foundation of our culture – time capsules from the past that are just as worthwhile, curious, and interesting as the people who lived, consorted, governed, gathered, and otherwise inhabited those buildings.

Second only to our passion for those grand old buildings that grace our streets is our passion for sharing what we know about preserving the contributions their architecture makes to our sense of place.  As with many things in life, there’s a lot of misinformation out there and wading through the mud and muck can sometimes be overwhelming.

So we do it for you.

It’s our nature to stay informed about all kinds of things preservation related, and we’re more than happy to share.  Our Resource Center is full of educational (and sometimes quirky and entertaining) content to help you learn more about what preservation is (and what it isn’t), how it happens, who’s doing it and where, what techniques artisan craftsman use in the traditional trades, the guidelines for preserving a historic building, how to’s for those who like to tinker, and so much more.

Knowledge is Power, as they so often say.

The dissemination of information is vital to a healthy and thriving culture.  And it’s just as important for healthy and thriving historic buildings.  We believe that the more you know, the more you can do, and as far as we’re concerned there’s no such thing as too many people “doing” historical preservation – the more the better.

Please be sure to stop back often, we’re always adding more information.

THIS IS A RE-POST OF A PODCAST INTERVIEW WE ORIGINALLY POSTED January 2019:

Chad Martin from Partners for Sacred Places met with me to discuss the work he does helping to preserve religious buildings from demolition through adaptive reuse and the creation of community resources.

Some of the topics we discussed include:

  • The economic impact of preservation.
  • How the work Partners for Sacred Places allows congregations and parishes to continue their mission as a community resource without selling their valuable real estate to developers.
  • The National Fund providing capital grants for preservation needs.  As Chad explains, when a church is choosing between giving money to programs that care for basic human needs and repairing the stained glass the restoration project goes to the bottom of the list.  The National Fund helps to ensure both needs are met.

Contact information for Partners for Sacred Places plus additional resources:

Website

Direct Contact Info

Facebook

Facebook page Danielle referenced: https://www.facebook.com/abandonedamerica.us/

Bio: Chad Martin, Director, National Fund for Sacred Places
Prior to his role at Partners, Chad was a pastor at Community Mennonite Church of Lancaster (PA). During his pastoral tenure the congregation developed an in-house art gallery, redeveloped an award-winning parking lot in accordance with the city’s green infrastructure plan, and substantially increased building use by community partners. Prior to this, Chad was the Ceramics Studio Coordinator at the Manchester Craftsmen’s Guild (Pittsburgh, PA). He has served on several boards of directors in Pittsburgh and Lancaster, including as a founding board members of the Union Project – an example of best practice for adaptive reuse of a historic religious property – and as Assistant Moderator of Atlantic Coast Conference (MC USA). He has written articles on art and/or theology and spirituality for several publications, including Ceramics Monthly, Worship, and Conrad Grebel Review. His ordained for pastoral ministry in Mennonite Church USA. Chad is a graduate of Goshen College (BA), Pittsburgh Theological Seminary (MA), and Leadership Lancaster.

 

THIS IS A RE-POST OF A WHAT WE ORIGINALLY POSTED SEPTEMBER 2012:

*Throughout the article denotes changes that have occurred since our original posting of this article. 

Tax Incentives for Preserving Historic Properties

The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation’s most successful and cost-effective community revitalization programs. It has leveraged over $62 billion in private investment to preserve 39,600 historic properties since 1976. The National Park Service and the Internal Revenue Service administer the program in partnership with State Historic Preservation Offices.

20% Tax Credit

A 20% income tax credit is available for the rehabilitation of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures.” The State Historic Preservation Offices and the National Park Service review the rehabilitation work to ensure that it complies with the Secretary’s Standards for Rehabilitation. The Internal Revenue Service defines qualified rehabilitation expenses on which the credit may be taken. Owner-occupied residential properties do not qualify for the federal rehabilitation tax credit. Learn more about this credit before you apply.* Each year, Technical Preservation Services approves approximately 1000 projects, leveraging nearly $4 billion annually in private investment in the rehabilitation of historic buildings across the country.

*NOTE: Before applying, the National Park Service refers to modifications to the 20% tax credit Public Law No: 115-97 (December 22, 2017) They advise interested applicants consult an accountant or tax advisor to make sure that this federal tax credit is beneficial to individual circumstances. 

10% Tax Credit

*NOTE: There previously was a 10% tax credit available for non-historic buildings built before 1936. Since our original posting of this article in 2012, on December 22, 2017, Public Law No. 115-97 amended the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.  Section 13402 changed the ITC and repealed a 10% credit for non-historic buildings.  Several websites suggest that change will likely impact a taxpayer’s ability to take advantage of the HTC.  As such, it is best to discuss concerns with an accountant, tax attorney, legal counsel, or the Internal revenue Service to clarify these changes. 

Tax Benefits for Historic Preservation Easements

A historic preservation easement is a voluntary legal agreement, typically in the form of a deed, that permanently protects an historic property. Through the easement, a property owner places restrictions on the development of or changes to the historic property, then transfers these restrictions to a preservation or conservation organization. A historic property owner who donates an easement may be eligible for tax benefits, such as a Federal income tax deduction. Easement rules are complex, so property owners interested in the potential tax benefits of an easement donation should consult with their accountant or tax attorney. Learn more about easements in Easements to Protect Historic Properties: A Useful Historic Preservation Tool with Potential Tax Benefits.

Further Information

Visit last week’s re-posting of our podcast with John E. Walters of LeWalt Consulting Groupe, LLC with more information on tax benefits related to historic properties.

Tell us your thoughts…

Have you been involved in a project that used the federal rehabilitation tax credit?

What questions do you have about the federal income tax credit for historic properties?

What do you want to know more about this tax incentive?

THIS IS A RE-POST OF A PODCAST INTERVIEW WE ORIGINALLY POSTED FEBRUARY 2019:

John Walters from LeWalt Consulting Groupe joined me to discuss how tax strategies can help with land and property preservation efforts.

We covered:

John’s contact information and additional resources:

LeWalt Consulting Groupe, LLC
https://www.facebook.com/LeWaltConsulting

727-388-9024

Tax Codes Referenced:
Conservation Easements
Historic Preservation Tax Incentives
Energy Incentives

Bio:
John is an Enrolled Agent, Certified Tax Coach, Best Selling Author, Instructor and Speaker at the firm LeWalt Consulting Groupe, LLC located in St. Petersburg, Florida.
He is known on LinkedIn as:
“Florida’s Leading Pro-Active Tax and Financial Change Agent for your Diverse needs and Individual Lifestyle”
At LeWalt Consulting Groupe, LLC our PASSION is creating “Tax Alpha” that helps you, as the Entrepreneur and Business Owner, live the “Ultimate”​ TAX-FREE lifestyle you desire using the complexities written into the Internal Revenue Service Tax-Code to your favor!
After all… We believe those numbers on your TAX FORMS is your “REAL” money, why not protect, preserve, and keep it for you and your family?
How may we Help You Live a Life that is less taxing…?
________________________________________________________________________

Transcript:

Announcer: Thank you for tuning into the Practical Preservation podcast. Please take a moment to visit our website practicalpreservationservices.com for additional information and tips to help you restore your historical home. If you’ve not yet done so, please subscribe to us on iTunes, Stitcher, and Sound Cloud, and also like us on Facebook.

Announcer: Welcome to the Practical Preservation podcast hosted by Danielle Keperling. Keperling Preservation Services is a family-owned business based in Lancaster, Pennsylvania dedicated to the preservation of our built architectural history for today’s use as well as future generations. Our weekly podcast provides you with expert advice specific to the unique needs of renovating a historic home, educating by sharing our from-the-trenches preservation knowledge and our guests’ expertise, balancing modern needs while maintaining the historical significance, character, and beauty of your period home.

Danielle: Thank you for joining us on the Practical Preservation podcast. Today, we have John Walters speaking with us about some tax tools that you can use to help preserve buildings. John is an Enrolled Agent, Certified Tax Coach, best-selling author, instructor, and speaker at the firm LeWalt Consulting Groupe, LLC. located in St. Petersburg, Florida. He is known on LinkedIn as Florida’s leading proactive state and financial change agent for your diverse needs and individual lifestyle.

Danielle: “At LeWalt Consulting Groupe, LLC., our passion is creating tax alpha that helps you as the entrepreneur and business owner live the ultimate tax-free lifestyle you desire using the complexities written into the Internal Revenue Service tax code to your favor. After all, we believe those numbers on your tax form is your real money. Why not protect, preserve and keep it for you and your family? How may we help you live a life that is less taxing?”

Danielle: So John, thank you for joining us and sharing your knowledge about the tax code and how that can be used to help us preserve buildings.

John: Well, thank you Danielle. I enjoy talking to people about taxes even though, I’m sure for most, it seems like a boring subject, but it’s one of the most things you’re going to pay all of your life and you might as be able to control it to your best ability.

Danielle: And understand it the best you can. I know I don’t feel I understand everything as much as I probably should. But yeah, I think the protections that people don’t understand that are written into tax code are really interesting because they can help you finance a project, they can help you make sure the building is preserved. Those things, I don’t think people necessarily think that those are tax code things, but they are. So thank you for sharing that knowledge with us.

John: Sure, no problem.

Danielle: I know one of the things that most people don’t either understand or are aware of is the tax conservation easement. If you could talk to us a little bit about that and help us understand. I understand a little bit from a preservation standpoint that the easement means that the outside can’t be changed because it’s protected, but I don’t understand what the tax ramifications of that is.

John: Okay. In the Internal Revenue Code, there’s a section called 170(h) and it talks about land conservation strategies, especially for federal and state taxes. What a land conservation strategy is designed to do is it’s designed to meet basically the tax payer’s – in this case, your client or whoever you’re working for – financial goals and take into heart their charitable desires.

John: In essence, it’s to preserve their properties and realize their most favorable economic outcomes, and actually, you get some tax savings out of it too. You become part of what we call the ready to conserve your assets for individuals and enjoy the related tax savings possible and the income opportunity in the property’s amenities.

John: In essence, what you want to do is let’s say you have a piece of property, but you don’t want it to be built on or you want to preserve it for generations to come and things like that. There are provisions in the tax code under the land conservation easement strategies is to actually give that land away. In essence, you’re giving it away for the purposes of being able to develop it or use it for some other commercial purpose to the government and you have official documents that tell you that you can do that. In turn, there are charitable deductions that you can take for that conservation.

John: With that, your land is preserved. Basically, you still retain rights to it, but you just can’t use it for other purposes, intended purposes.

Danielle: So it almost restricts you? Yeah, it restricts what you do with it. Okay.

John: Exactly. You have basically a deed of restriction, but that land can be used for whatever thing that you set it up for.

John: For instance, let’s say that you have land and you want to preserve it for hunting and you don’t want anybody to build anything on it. You could have a land conservation easement for that property; it could still be used for hunting and you can use for that purpose. You can even build a structure on there like a lodge or something like that and people could use it for hunting, but they wouldn’t be able to use for some other commercial development.

Danielle: [crosstalk 00:06:17] Yeah.

John: Yeah. In turn, when you take that conservation easement, the government’s giving you a tax deduction and it can be up to 50% of your adjusted gross income. Let’s say for every dollar this property is valued at, you go get it appraised and stuff, sometimes you can get to four to five times the benefit. In essence, what you’re telling is, well, if I built it commercially, this is what it would be valued at. But if I-

Danielle: So if you develop the property, that’s why they use as your [crosstalk 00:07:00]

John: Right.

Danielle: Okay, that makes sense.

John: So if I was going to put a housing development on it, it would be worth X. But if I say, “I don’t want to allow that on there,” they’re going to take that value of the housing development, it’s appraised out, subtract what the land is worth right now, and you get the difference in the tax credits.

Danielle: Okay. Okay, and then is that an actual credit onto … I’m trying to think about what I’m familiar with preservation easements. You usually then donate that to a nonprofit, is that correct? Or is the conservation a little bit different?

John: Yeah, it’s actually donated to the government, per se, because it’s under tax code. Now, there’s the charitable contributions fall under the federal tax code, but you can also get state tax credits too, depending on what state you’re in and the property.

Danielle: Yeah, I know. Yeah, the preservation tax credits are very dependent on which state you’re in, how robust they are.

John: Mm-hmm (affirmative), exactly.

Danielle: Yeah. So this benefits the person that’s doing the easement by reducing their taxable income. Is that pretty much what the goal is?

John: Right. You can reduce your actual tax that you would owe by between 30 and 50% of your adjusted gross income.

Danielle: Okay.

John: Now, let’s say it exceeds 50% of your gross income in that particular year, those charitable credits can be carried over for many years into the future until you can use them up.

Danielle: Okay.

John: Yeah, so typically, if you don’t have a whole lot of income in that particular year, it will just carry over until you can use those up.

Danielle: Use it up, so there’s not a time limit. I was thinking there’s a difference – and now this is telling you what I don’t understand about taxes. There’s a difference between a credit and a deduction, is that correct? So the credit is like just straight money to you, it’s not based on any kind of scale, correct? Is that what-

John: Well, yeah. There are credits that are basically a one-to-one dollar reduction in your taxes. Now, in the credit world-

Danielle: Okay, so [crosstalk 00:09:27] a percentage. Yeah.

John: Exactly. In the credit world though, you have two types of credits. You have what we call non-refundable, meaning that it can reduce your income, your taxes to zero. Then after that, if you still have more credit, you can’t use it anymore. You won’t get additional money back. But if they’re refundable, that means that you could have zero income tax that you owe, and still get a refund back from the government. Now-

Danielle: Oh, okay. Makes sense. Yeah.

John: And with the deductions, they are a percentage, depending on what your marginal tax bracket is. So in essence, a deduction, if you’re in the 25% tax bracket, then you’re going to get 25% or 25 cents back on the dollar for every dollar you deduct.

Danielle: Okay, okay. I know I see, in this area, a lot of conservation easements for farmland.

John: Exactly.

Danielle: Where the families want to preserve their farms from development but they still want to be able to use them and farm them. The easement doesn’t stop you from being able to use it from how you’ve been using it; it’s how you write the easement. Is that correct?

John: Right. So for an example like that, in farming and ranching, Ted Turner, which we all know from the broadcasting world and everything else, he has huge tracks of land in Wyoming and Montana that he has easements on. He still allows – there’s wild buffalo that run on there. He has cattle that graze and everything so it can still be used for ranching, but no one can actually develop it into a housing development or any commercial purpose.

Danielle: Okay, okay. Very, very interesting. Thank you. So then when you go to do the charitable deduction, then they figure out what the amount would be if they developed and then they give you … Is it the difference? Is that pretty much what your credit is?

John: Yeah. So for instance, let’s say it would be valued, appraised, at a million dollars if it was fully developed, but right now in your hands, ownership, it was worth really only $100,000, per se, in undeveloped land and everything else. So in fact, you could probably get a deduction for the $900,000 difference there.

Danielle: Because you’re not using it to develop it completely. It is a benefit then to the community too. That does make sense to me as to why it would be a tax credit also because you’re agreeing to leave it the way it was. It’s not [crosstalk 00:12:20].

John: Right, yeah.

Danielle: Yeah. So what are the risks to somebody who wants to use an easement or a land conservation easement to preserve their property? What would the risks be to that?

John: Well, a couple risks, not necessarily to the owner of the land. There are people that actually don’t own the land but want to invest in the ownership of that property with the original owner to get these tax credits.

Danielle: Oh, right.

John: So some of the risk there would be basically you may not get the asset protection as a limited partner instead of the ownership of it. Operating reserves set aside at a closing. There may be monies that are needed in excess of that property for the conveyance of it and the deed. Could be additional capital calls if other risks – or not risks but unknowns are known about the property. Maybe there was so encumbrances on the property that you didn’t know about and stuff, so money would have to become available to take those encumbrances away so that deed could be unrestricted.

John: Sometimes there’s a taxation risk basically due to audits because sometimes these things are not put together correctly. Lately, there’s been a little bit of talks in the IRS about making this what they call a listed transactions, where they still allow it, but you would have to list it there of what the transaction was and basically have your, per se, ducks in a row if you wanted to-

Danielle: [crosstalk 00:14:19] yeah.

John: Yeah. Of course, as always, anything in the code is subject to abuse.

Danielle: Right.

John: You may be working with unscrupulous people, a.k.a. crooks, that want to take your money basically and don’t do it properly so the whole deal falls apart.

Danielle: Yeah. That and I know that when we talk to home owners about it, people are nervous about restricting their deeds. I don’t know if you have that knowledge if it … Does it lower the value of the property or is it usually somebody who would be interested in conservation, is that something that would be appealing to them?

John: Oh, it would be very appealing to someone because most of us do have a charitable gift to us or want to do something, either that, preserve it for nature or actually for our legacy and stuff like that. But even if you end up selling the property or whatever, that easement and everything else can convey to the next group of people in ownership.

Danielle: Yeah, it attaches to the deed. Yep. Then they then have to … As far as I know, that is the only preservation tool that actually restricts what you can do because even being on the National Register, that building can still be torn down if you take the appropriate steps and get approval. You know what I mean?

John: Right.

Danielle: So that doesn’t protect it as much as the easement does. I know of a project here in Lancaster that they were going to develop. It was where Thaddeus Stevens had his offices in Lancaster. They were going to tear it down and then the nonprofit that held the easement came forward and said, “No, you can’t. We have an easement on this property.” And they actually ended up, it’s really a cool building to look at now because they incorporated the modern construction around this building. It’s marrying that old with the new, but they had to keep the original building there because they did hold the easement.

Danielle: That’s the only preservation tool that I know guarantees that the building will not change and have to stay the way it has been. So very, very [crosstalk 00:16:51].

John: Yeah, exactly because you are actually accepting a deed of restriction that permanently prohibits some sort of commercial exploitation and rights to the real estate property and stuff. You’re absolutely right. That’s pretty much the most ironclad vehicle there to be able to preserve something.

Danielle: Right, okay. And then I know you had given me some notes. I have that you would talk about the energy efficient property credits.

John: Sure, sure.

Danielle: Those are being extended, which is kind of exciting for people who are wanting to maybe put some green energy to use in their homes.

John: Yeah. The wind and solar credits have actually been extended to 2024 because our government sees the value of doing that and making us less reliant, basically, on fuels like oil and gas and things like that. The interesting thing is for these types of credits, you can qualify up to 30% of the eligible cost, which in fact, I just did one for a client this tax season.

John: They invested in a solar roof. They spent $52,000 on the roof. They ended up getting a $17,000 tax credit back, so it kind of wiped out all of their tax that they owed. Yeah and they’ll actually get to carry some over into the subsequent years because they used up all the taxes that they had this particular year.

John: So yeah, the beauty about theirs is … They were so excited because they started getting checks from the power company. In fact-

Danielle: Oh, that is exciting.

John: Yeah! They got a $400 check back from Duke Energy, which is the provider in the area. They were so elated because now the power company owes them money.

Danielle: Yeah. I know that when we started talking, you and I had started talking about doing this podcast topic, we had just been talking about the Tesla roof material. Those are individual solar cells. They picked all things that would be traditional materials and you can’t tell the difference. I’ll be curious to see how those are embraced, once they do their full roll-out, by the preservation community because those solar panels, the types of [crosstalk 00:19:42] they chose-

John: Oh, the new shingles?

Danielle: Yeah, but they chose slate and tile, those are not inexpensive roofing materials anyway. So if somebody’s going to do that, I’ll be curious to see how it’s embraced by the preservation community because there’s definitely that intersection of green and then traditional-looking materials at least.

John: Right.

Danielle: I think that’s pretty exciting.

John: Yeah. A lot of those things are coming out from the world of the Tesla vehicles and all of that to Elon Musk and producing new types of materials.

John: Yeah, that was the thing is people, they liked the idea of the solar, but they didn’t want to have these what they would consider ugly panels on their roof. So now-

Danielle: [crosstalk 00:20:29], yeah, yeah.

John: Yeah. It’s probably going to be in your world, open up a lot more opportunity and people to want to do that because yeah, now they can more look like the original property that we’re trying to preserve and everything, and get the efficiency out of it of modern energy systems.

Danielle: Yeah, definitely. I think that’s something exciting to definitely keep an eye on.

Danielle: The other thing and something that I think that people know about but it’s kind of like they don’t know a lot about it is the rehabilitation credits. I know the federal government has theirs, and then the State of Pennsylvania has some. There’s not a lot of money in the state. The tax credits here are very new for rehabilitation. I think they’re only a couple of years-old. I know that the federal tax credits have been around for a while and they’ve actually shown good economic development benefits, but if you could talk a little bit about the Rehabilitation Credits in the tax code.

John: Yeah, there’s rehabilitation credits.

Danielle: That’s a tough word.

John: Yeah, I know. That’s under Internal Revenue Code Section 47. There are actually two of them. One, it’s a 10% of the qualified rehabilitation expenditures, or whatever you spend, with respect to the qualified rehabilitated building. Other than a certified – it doesn’t have to be a certified historic structure in this case, okay?

Danielle: Right.

John: You can still get 10% of that. Now, in the second case, you can get 20% of the qualified rehabilitation expenditure, or cost, if it is a certified historic structure. So there, you can benefit even more.

John: Basically, the federal government is telling us, “Look, we understand you want to keep these buildings. They’re great buildings or whatever like that. They just need some tender love and care. We’re going to help you lower the cost to go ahead and rehab these buildings, especially if you’re going to keep them in order, use them for an economic purpose.”

John: So what we’re kind of looking at too is, okay, what’s in it for the government? Well, obviously if you’re going to be able to use that building, rehab it, for its use or just bring it back up to code so you can keep using it, well, they’re going to get more tax money, right?

Danielle: Right, right.

John: Because you’re going to remain in business and use that building. Well, the states, obviously, are still going to benefit because they’re going to get additional property taxes and they’ll probably reassess it on the rehabbed cost of it because, oh, it’s gone up in value because you rehabilitated it. There’s two benefits there.

John: Now, obviously the states benefits aren’t as rich as the federal government because, as we know, our government’s got plenty of money to throw around. Right?

Danielle: Right. Maryland has a really good rehabilitation credit system though. Theirs is, I think if you combined the federal and Maryland’s, you can get up to 50%.

John: Yeah.

Danielle: Yeah, so some of the states have a really good system.

John: I think it’s great. And so basically, it’s something to take into benefit there if you have a building that would meet those criteria. There again, you might get a little bit if it’s not a historic building, but still, it might be in your benefit to do it.

John: Now, like everything that we do in the tax code, there’s good and bad things. Well, the good thing is, yes, you could get some assistance there for doing it. The bad thing is you might have to jump over some hurdles, some paperwork, this and that, and everything else. But I found that once you do it, it’s well worth it.

Danielle: Yeah, I agree. It is a process to get through that because at first, you have to be approved by the State Historic Preservation Office, and then you go. They actually, once they have everything that they need, then they forward it onto the National Park Service for review. But typically, it is a lot of paperwork, but most people can get through it. It’s just having to stay on top of it.

Danielle: I do know one thing that is, and the tax benefits, one thing that’s kind of frustrating to homeowners that this is mostly or it is just for income-producing properties. So you’ve either gotta be a business or a bed and breakfast or rental unit, something like that.

John: Right.

Danielle: One other thing that I learned that’s very interesting is the tax credits on your passive income. Well, most people don’t have a lot of passive income. So I sat through a presentation. I’m like, “Oh, that makes so much sense.” Banks are willing to pay, buy the tax credits from you, because they have passive income and they can use them. The credits are transferrable. I didn’t know that.

John: Yeah, yeah.

Danielle: When I heard that, I was like, “Oh my goodness. I never would have thought to shop my tax credits to anybody,” but there are people who do it.

John: That’s an interesting point that you bring up. You know, a lot of people say, “Well, if I can’t use them, I lose them.” No, they actually have benefit and people are willing to use them. The other thing too is you’ve heard of those called carbon tax credits for pollution and everything else?

Danielle: Yeah, yeah.

John: Well, let’s say you have a business and you get X amount of tax credits, but your business is pretty efficient, non-polluting, and everything else. You get these credits but you don’t use them all the way or whatever like that. Well, there’s certain other businesses that are more polluting and they need more credits than they actually get from whatever they’re producing, so they’ll buy those credits from you and that helps them out too. There is a market for that.

Danielle: Yes, I would have never even thought that until I was sitting in that presentation. I’m like, “That makes so much sense.” Because most people, even if they’re high-income people, don’t have a lot of passive income, but banks do. I thought that was a really, really interesting thing that I learned.

John: Yeah. And the thing most people don’t understand is you have to match up the types of income and losses to be able to take them. For what you’re just saying there, if you have passive income, you have to have passive losses to match up against them. You can’t take income that you earned from your job and actually offset passive income or investment income in there. That’s a key.

John: What we try to do there is if we do have a client that does have lots of passive losses, we try to find some passive incomes. We call it a PIG PAL strategy. Passive activity losses matched up with passive income generations.

Danielle: Oh, okay. Very cool. Yeah, you understand how to maximize these strategies. I thank you for sharing your knowledge with me and our listeners. Could you tell me, unless, did you have anything else you wanted to share or anything that we didn’t care that you wanted to?

John: Well, I think that’s pretty good.

Danielle: Oh, okay. Very good.

John: There’s so much embedded in there.

Danielle: There is.

John: Yeah.

Danielle: And I’ll definitely, the tax codes or sections that you referenced, on the website resource section, I will definitely put those there so people can go and read them.

John: Okay.

Danielle: And your information will definitely be on the website too, but how can our audience get a hold of you if they have specific questions or they want to use your expertise to help preserve their buildings?

John: Well, they can actually call my office if they want. My phone number directly is 727-388-9024. If, by chance, somebody doesn’t answer the phone, leave a message and we get back to you in a short amount of time.

John: You can also go to my website it’s www.lewaltconsultinggroup.com and leave a message there or we have lots of information on the website that you can contact us or find out some other information about the different tax codes. I think you’ll probably put our website on your-

Danielle: I will, yeah, I’ll definitely make sure that gets put on the website too. We’ll have links, and I’ll have the additional information, and anything else that we think that would be good resources for all of our listeners.

Danielle: Thank you so much for joining us today.

John: Okay, well, yeah. It was a pleasure talking here and one last thing.

Danielle: Oh, sure.

John: With the broadness of the tax code, people think, “Oh, it’s just in general,” or whatever. There’s really something for everybody in there, we just have to sometimes dig deep for you. If you employ certain people, there’s tax credits for employing certain groups of people.

Danielle: Right, yeah. We had just learned that we could get a Made in America tax credit because we manufacture. I never even thought about what we do as manufacturing, but it is! There’s always something in there that you might not even think would apply to you.

John: Yeah, so every situation, individual situation, is different. Don’t think that there’s nothing in there for you. There may be, depending on what you want to do. Hey, it’s worth a phone call or a short email conversation. We can see what we can do for you.

Danielle: Okay, very good. Thank you so much again.

Announcer: Thanks for listening to the Practical Preservation podcast. The resources discussed during this episode are on our website at practicalpreservationservices.com/podcast.

Announcer: If you received value from this episode and know someone else that would get value from it as well, please share it with them. Join us next week for another episode of the Practical Preservation podcast.

Announcer: For more information on restoring your historic home, visit us at practicalpreservationservices.com

 

Window repair, restoration, or replacement is an unavoidable topic of concern in historic buildings. Windows in your historic property are like the eyes of the home. They are an important piece of the historical fabric of the location, and also play an integral part in energy efficiency of the property. Simultaneously, they are one of the most vulnerable and “at-risk” elements of our architectural heritage. Replacement is not always the most cost-effective or energy-efficient answer. Determining the extent of disrepair in your windows is your first step in deciding whether to repair, restore, or replace them. 

Photo of our restoration work on windows at Franklin Street Station in Reading. 

Why are original windows important? They are considered a significant feature of a building, making up both exterior and interior architectural elements and usually 20-to-30 percent of the surface area of the building. The shape and materials, moldings, trim and window pane arrangements are all clues to the age of the building. To further illustrate these unique characteristics, here are examples of window styles and characteristics from the 18th, 19th, and early 20th century. The majority of the features that make original windows special are not replicable in replacement windows; you could replicate them in reproduction windows, but that is not what most people think of when they are discussing replacement windows. These elements include antique (wavy) glass, true divided light sashes, and traditional joinery.

Why are original windows endangered and at-risk? Several preservation organizations, including Maine, Virginia, and New York, have noted in recent years the endangered status of historic original windows. Even we have had first-hand experience talking with well-intentioned homeowners who’ve been convinced by saavy sales people to replace their original windows with modern ones under the guise that they are more cost-effective or energy efficient, only to regret the decision a few years later when the “superior” new windows are no longer functioning properly and are incurring more costs for energy, repair, and replacement. 

Are original windows energy efficient and cost-effective? Energy efficiency is a major concern when it comes to windows. We’ve noted in a previous post on Siding on Historic Homes that heating and cooling energy loss is associated most with windows, doors, and roofs, and this is often worse with modern replacements and materials. Meanwhile, original windows have a proven track record of durability that far exceeds that of new replacement windows, as long as they are properly maintained. In fact, most are 100+ years old. The National Park Service’s Preservation Brief No. 3 and their Testing Energy Performance of Wood Windows in Cold Climates both discuss energy efficiency in greater depth. The latter of the two aforementioned resources points out that replacing historic windows does not necessarily result in greater energy savings than upgrading that same window. If you’re short on time, you may instead choose to read one of our other brief articles on energy-efficiency and cost-effectiveness of original windows. On average, the energy savings after a replacement window is installed is less than $2/year. Restoring and repairing original windows can achieve almost the same energy efficiency, and is more cost-effective in the long-run because new windows will not last as long. 

Now that you understand the significance of original windows and the importance of saving them, how do you know if your original windows are repairable or restorable? First, consider that most materials and methods used to build the original windows are made to be repairable, so there is a higher likelihood that they are salvageable. Replacement pieces can be made rather than replacing the entire unit (consider our woodwork at the formerly abandoned Franklin Street Station in Reading, PA, whose windows were in a shocking state when we first encountered them; alternatively, you can see the results in-person while enjoying craft beer and a bite to eat at Franklin Street Brew Pub now in the station). Things to evaluate to see what repairs windows might need:

  • Loose frames and sash components
  • Slipped sills
  • Poor fitting sash and storm assemblies, and misaligned frames
  • Loose, open, or decayed joints at sash or frame corners
  • Loose hardware, broken sash cords/chains, worn sash pulleys, locking difficulties
  • Deteriorated weather-stripping
  • Broken/cracked glass, loose or missing glazing putty
  • Peeling paint
  • Window well debris accumulation

Some of these issues are easy to see and address. Others, including locking difficulties and window well debris accumulation might signal a misaligned sash and could necessitate the involvement of a skilled person to make those adjustments (or at least consult with you about what to do). All of these repairs will increase the energy-efficiency of your windows.

What do I do if a previous owner already replaced the original windows and updated replacement is necessary? There are several options to choose from:

  • Rebuild with antique glass
  • Rebuild with true divided lite and insulated glass
  • Replacement with modern replacement windows – The National Park Service’s Preservation Brief No. 9 has a list of what to look for in replacement windows, as well as ideas of where to find historically sensitive replacement windows

For more information and resources:

  • Visit our window post archives link
  • We typically recommend 2 Canadian manufacturers for modern replacement windows: Norwood Windows or Loewen

Gabe Matyiko, vice president of Expert House Movers of MD, Inc. and a 3rd generation expert in structural moving, joined the Practical Preservation podcast to discuss information about the family’s house and structural moving business. We covered a multitude of topics including:

  • The origins of the company, and how Gabe came back to his family’s business in 2002
  • Business models in the industry, and the scope of practice of the business, including discussions of feasibility of projects and all of the nuanced planning involved
  • How instrumental structural moving and raising can be in preservation projects, particularly given the modern challenges related to flooding – rising-sea levels and increased frequency of storms, poor storm management in some water-front cities, the high-cost of flood insurance – and competition and encroachment of urban sprawl and developments
  • The benefits and challenges of the company’s being featured on social media, TV, and local and national television
  • And fun details about one of the most unique, challenging, and ambitious projects the company has taken on in recent years, involving a barge as one means of transport!

 

Contact/Visit/Follow:

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For this week’s blog feature we decided to focus on a story of monumental love and history, in honor of Valentine’s Day this Friday. If you’re a romantic, there’s a love story for you. If you’re not a romantic, never fear! We’ve included our usual focus on historical buildings and materials, and in this case, renovation and rehabilitation efforts at the site. This post includes something for everyone!

 

Boldt Castle. Photo courtesy of Laura K.

 

First, for the romantics among our readers:

Set on Heart Island (how apropos!) in Alexandria Bay in the Thousand Islands region of Upstate New York, Boldt Castle – a castle reminiscent of palaces scattered throughout the Rhineland-Palatinate state of Germany and built in the chateauesque architectural style – and its surrounding buildings originated from the love of a man for his wife. More specifically, that man was George C. Boldt, the proprietor of the Waldorf Astoria Hotel in New York City, New York. His wife was Louise Boldt, a native of Pennsylvania, and the daughter of his former employer. Various accounts note they fell in love within a short time of meeting and that they were close companions in love, life, and business; Louise’s hostess and decorating skills were said to complement Boldt’s hotel business beautifully. They had two children and the family frequently vacationed to the Thousand Islands. Boldt decided to combine his love for his wife and the islands in an over-the-top show of affection, and no standard box of chocolates or bouquet of roses would do. He put his significant wealth to use creating a monument of his love for Louise on his newly-dubbed “Heart” Island (formally known as Hart Island after the previous owner); note the oft-repeated heart motif in the photos below.

As with many love stories, this one has a tragic twist. In January 1904, not long before Valentine’s Day, Boldt’s beloved wife Louise, the inspiration for this fairy tale island project, suddenly passed away still in her early 40’s. The grief-stricken Boldt immediately called a halt to construction on the project and never returned, reportedly unable to bear setting foot there without Louise. The magnificent work of countless artisans was left to deteriorate for most of the next century, a decaying representation echoing Boldt’s heart-break. Years later, the Boldts’ granddaughter even co-authored a book about the  story. 

 

 


Tile detail of heart motif. Photo courtesy of Laura K.


Heart motif in stained glass dome. Photo courtesy of Laura K.


Heart motif on castle exterior. Photo courtesy of Laura K.


Heart motif hidden in stone corner. Photo courtesy of Laura K.

 

Now, for the non-romantics:

For lovers of historical architecture, the years of deterioration and vandalism of the Boldt Castle property on Heart Island could have been a heart-breaking tragedy in and of itself. Luckily, in the late 1970’s the Thousand Islands Bridge Authority acquired the property and agreed all net revenues from the castle operation would contribute to its rehabilitation and restoration. The full-size Rhineland castle and other structures on the island have slowly been rehabilitated over the years, and projects are ongoing.


Detail of unfinished and vandalized interior wall. Photo courtesy of Laura K.


Bedroom intended for Louise, fully restored. Photo courtesy of Laura K.

 

However, some concerns have been noted regarding the historical integrity of the site by astute preservation-minded people – including Thousand Islands author and architectural historian, the late Paul Malo – who have pointed out that as each room becomes renovated, little to no preservation is done on aspects of those rooms in their original state. Much of the rehabilitation efforts reportedly have been completed with entirely new plans and materials, with little reference to original plans and materials and ignoring replacement-in-kind, despite the proposed original intentions of the Bridge Authority. Further, little of the detailed historical context is presented on-site, and tours are self-guided with only small plaques with limited information throughout the property. Previous reports by those affiliated with the site and behind the rehabilitation acknowledge that compromises were made between restoration and preservation in some cases, in favor of economic sustainability and what would draw tourism to the site. Those same sources have asserted that, contrary to questions by preservationists, extensive research and expertise were involved in carefully assuming what the project might have originally looked like had it been completed as planned.             

The treatment of Boldt Castle over the past 40-plus years serves as an example of important discussion points for historians, preservationists, history-buffs, and even private-home owners and the general public, including deciding when restoration or rehabilitation are more appropriate than preservation. What is the best way to marry such projects with modern needs such as tourism, education, and cost?  More specifically, should we focus on what makes the general public happy and creates the most revenue (including romanticized stories that are possibly embellished and may even promote more deviation from the truth in the form of updates to a property driven by the legendary tales) at the cost of historical integrity? Should the love of love, or any questionable history or desire we have about how we wish things had been, be allowed to dictate how we care for or update a historic monument?

Regardless, no matter where one stands in terms of their romantic or preservation-mindedness, no one can deny the beauty of Boldt Castle. Its beautiful love story and aesthetic beauty remind us of all the ways we can show and feel love.  

P.S. If you would like to experience Boldt Castle for yourself, visit the website to learn more. If the Boldt Castle project has inspired you to learn more about maintenance and preservation, visit our post on maintaining your historical house and other resources on our blog. If you’re looking for a gift for yourself or a loved one for Valentine’s Day, consider sharing a free copy of our “Maintenance is Preservation” Booklet report – just send us a request via our contact page.  

 

Cory Van Brookhoven and Lowell Wenger of Lititz Historical Foundation joined the Practical Preservation podcast to discuss information about the museum and general Lititz history. We covered a multitude of topics including:

  • The Moravian origins of the town, including town regulations about who could live in the town proper and rules against taverns or dancing in the streets!
  • History of the museum and the homes it is housed in
  • Unique artifacts owned by the museum, including a recent acquisition relevant to early postal service and ongoing preservation efforts
  • The large geographical area accounted for by tourists to the museum
  • Diverse events the museum hosts, including weddings
  • Ways the public can learn, participate, or contribute to the museum – note that this year, their season begins in April, a month earlier than usual!

Contact/Visit/Follow:

Website

Facebook

Twitter

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Linkedin

 

Scott T. Hanson of Your Historic House joined the Practical Preservation podcast to discuss his book, Restoring Your Historic House, the result of 4 years of hard work and dedication to present a practical and comprehensive guide for historic homeowners. We covered a multitude of topics including:

  • How the present-day Conway Scenic Railroad and train station served as a catalyst for Scott’s passion for preservation
  • Scott’s observation that a dearth of information on preservation for homeowners necessitated filling that gap, and inspired him to write his book
  • Lessons, challenges, and resources for aspiring preservationists and homeowners
  • Advice for homeowners interested in preservation, restoration, or rehabilitation, including practical examples of ways to offset costs
  • The book’s detailed inspiring stories of homeowners’ projects, including a description a local Central PA project featured in (and on the front cover!) of the book
  • Information on book-purchasing options and opportunities to meet Scott

Contact/Follow:

Scott T. Hanson

Website

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Buying Options:

Amazon.com for a discounted price

Scott’s website for signed and personalized signed copies, as well as other books for sale

 

Age is not the only thing that makes a building historical. The traditional materials and craftsmanship in the original construction of your historical building are an essential part of its historical fabric. Preserving its architectural integrity can only be done by using the same traditional materials and craftsmanship that made your building what it is today – a picture of the past. Original or historically-accurate siding on a historic home or building is an overt example of a building’s era and unique characteristics. 


Photo by Pierre Châtel-Innocenti on Unsplash

 

Synthetic vs. Wood Siding: Life-span

  • Synthetic siding has a potential life of at least 50-60 years
  • Wood siding has a potential life of at least 200+ years

Wood was abundant in Early America (and continued to be so throughout our history), and thousands of historical buildings in the Northeast are adorned with wood siding. Often, owners of these buildings look to alternative siding methods to replace wood siding deteriorated beyond repair. Their rationale for such practices is that they want to reduce the cost and effort of its maintenance, or to save on energy costs; conventional building wisdom maintains that vinyl and other synthetic siding lasts longer, requires less maintenance, and wastes less energy. The truth is this: in almost every instance, installation of synthetic siding will not save energy and maintenance costs. It will last a very long time; there are buildings that still retain their original synthetic siding applications from when they first appeared 50-to-60 years ago. And while that sounds significantly durable, it rather pales in comparison to the fact that there are historical buildings from 200+ years ago that still retain their original wood siding (siding that doesn’t sit many, many years in landfills when it needs to be removed). Synthetic siding won’t only add to landfills, it will also compromise the building’s historical integrity, and can cause irreversible damage to the building. 

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Synthetic vs. Wood Siding: Energy efficiency

  • Since walls are not a significant source of energy loss, synthetic siding proves, at best, a nominal energy savings

The myth that synthetic siding is more energy efficient than wood siding is pervasive and persistent – perhaps because it is easy to fall into the habit of assuming newer is always better. Newer is not always better, and even newer-with-an-insulated-backing is only nominally, if at all, better. The National Park Service’s Preservation Brief No. 3 highlights the fallacy regarding the weight placed on siding for energy efficiency, noting that walls aren’t even where the most heating and cooling energy is lost in historical buildings – the roofing system is. Spending money to replace wood siding with synthetic siding will not usually return the investment in energy savings for this reason. A much more cost-effective focus for energy savings are the windows, doors, and roofs of historical buildings.

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Synthetic vs. Wood Siding: Maintenance

  • Synthetic siding materials require much maintenance and can even create additional maintenance for other parts of the building

Synthetic siding materials are not maintenance-free. Aluminum will dent, and if painted, requires the same amount of paint maintenance as wood siding. To properly maintain and preserve aluminum siding, it must be cleaned regularly. Vinyl is a plastic and vinyl siding is subject to the same pitfalls as any other plastic: it cracks and shatters if impacted, it deteriorates with exposure to the extreme temperature changes of summer-to-winter and back again, and it simply cannot be installed to maintain a tight fit in both summer and winter because of the amount of expansion and contraction those extreme temperature changes cause. Vinyl siding will even interfere with a building’s ability to “breathe” and result in excess moisture retention and airflow problems causing unhealthy air quality for the building’s occupants, actually creating additional maintenance needs for other materials, systems and areas of the building.

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Synthetic vs. Wood Siding: Historical integrity

  • Synthetic siding does not preserve the many features of wood siding applications that contribute to the very fabric of a building that makes it historical

Synthetic siding will compromise the building’s historical integrity. The National Park Service’s Preservation Brief No. 8 explains that the materials of a historical building contribute to its historical fabric, noting that “Preservation of a building or district and its historical character is based on the assumption that the retention of historical materials and features and their craftsmanship are of primary importance.” There are many features that make wood siding of primary historical importance to your building. The tools used, geographically-specific craftsmanship techniques, types of clapboards and how they are manufactured and installed, the profiles, decorative edging, and patterns of application that make historical wood siding worthy of preservation are all lost when synthetic siding is used. For example, wood siding on Mid-Atlantic buildings from the early 1800’s to the early 1900’s had distinctly different looks, features, and craftsmanship techniques than those in New England during the same time frame. The stock synthetic siding options available today simply cannot achieve that same level of variation between historically significant architecture styles. 

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Synthetic vs. Wood Siding: Serious health problems

  • Synthetic siding not only masks the health of a historical building, it deteriorates it, endangering both the building and the people who live or work in it

Synthetic siding causes more serious problems. Wood siding on a historical building is also one of the most easily read indicators of the general health of the building. Paint peeling from wood siding can be an early warning signal that there are moisture problems threatening the building, and can sometimes even indicate where those problems are rooted (e.g., gutters or downspouts that aren’t working, improper flashing/weatherproofing, etc.). If wood siding is replaced by or covered with synthetic siding, it often masks any early signs or symptoms of moisture issues and results in more extensive moisture damage. Not only does synthetic siding mask the health of a building, it deteriorates that health. Since synthetic sidings to not allow a house to breathe the way wood siding does, it exacerbates any moisture problems that are present or develop in the future by essentially locking the moisture in the building. In doing so, synthetic siding encourages the growth of molds that turn the building’s air quality into a toxic environment that endangers the health of its occupants. Vinyl siding specifically also carries other health and safety concerns like the toxic fumes it emits when heated, and the cancer risks currently thought to be connected to the polyvinyl chloride plastic resin vinyl siding is made out of. 

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Synthetic vs. Wood Siding: Damage

  • Synthetic siding can result in permanent damage to the character-defining features of a historical building

Synthetic siding can cause irreversible damage to the building. An uneducated, and often heard argument claims that when need be, vinyl siding can simply be removed if it is applied over top of the original wooden siding. This is in part true, but it is in part reflective of a naïve understanding of what contributes to the historical fabric of a building, and how even seemingly simple changes can result in permanent damage to that fabric. Once again, Preservation Brief No. 8 from the National Park Service sets the record straight. It states, “there is frequently irreversible damage to historic building materials if decorative features or trim are permitted to be cut down or destroyed, or removed by applicators and discarded.” During the installation process of synthetic siding, even if it is only being applied over existing wood siding, the original wood siding can be permanently damaged by furring strips nailed onto the walls to create a flat surface to install the new siding on. Windows, door trim, cornice, decorative trim and molding, and other projecting details are sometimes permanently altered because the cost of custom-fitting the new synthetic siding to retain their character is too much.

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Evaluate your building’s siding:

  • Do any areas of my historical building have synthetic siding materials applied over wood siding?
  • If yes, do I have a plan for restoring the original wood siding?
  • Are there areas of my wood siding that have already been replaced because of deterioration?
  • Were they replaced with comparable wood materials and craftsmanship features?
  • Do they blend in with the original siding?
  • Is my wood siding evaluated regularly and properly maintained? Is it re-painted every 5-10 years?
  • Do I have a maintenance plan and agreement with a qualified and competent historical restoration company to ensure proper maintenance of my wood siding?

 

PART 3, THE FINAL PIECE IN THIS 3-PART SERIES of working on your old home explores using a good design. Using a good design refers to integrating additions, renovations, or even new construction into your historical building, not necessarily “copying” historical architecture contemporaneous to your building’s era. It simply needs to integrate with the historical representation of your building and the surrounding neighborhood. 


Photo by J. Remus on Unsplash

The development and evolution of historical neighborhoods over time follow their own rhythm and pattern, unique to each individual neighborhood. Often, the architecture is as well. Sympathetic or compatible additions and renovations that are right for one property might not be for another, and your project should start with an appreciation of the unique architectural character of the neighborhood of which your building is a part. This understanding should influence and shape the design of your project. A good design is not just about a solid understanding of the architectural character of a building, it should also address the marriage of old and new – styles, materials, and workmanship. If it does not, your project could ruin your building’s architectural character instead of augment it.

For example, many historical buildings have been carefully designed to address water and moisture issues by “breathing” the moisture out, as well as shed it carefully down the exterior of a house in a way that avoids water permeation as it moves down the house. If your project does not use a design that works in the same manner, water will begin to penetrate your building and lead to fungal deterioration, which in turn will lead to major expenditures and repairs, if not complete loss of some of your building’s features. Another common bad design seen during restoration on historical buildings is the use of non-sloping window sills that do not shed water, and can lead to maintenance nightmares. Having a design for your project that not only embodies the architectural character of your building, but also addresses critical compatibility issues (such as water-shedding) is key to preventing corrosive damage to your building. 

Ask yourself:

  • Has my design been created, or reviewed, by a qualified contractor who understands historical buildings and how their designs function?
  • Do I see any existing areas in my building where the design appears to be incompatible with historical integrity and/or physical functioning of the building?
  • Am I familiar with my neighborhood’s sense of place and how the local architecture contributes to that character?
  • Does my design include modern materials? If so, are they compatible with the historical materials existing on my building?
  • Do all of the materials, workmanship, or functional elements of my design work together in the same way?
  • Does my design take into consideration important aspects like scale, building form, setback and site coverage, orientation, architectural elements and projects, facade proportions and patterns, trim and details, etc.?