One of the biggest concerns owners and managers face is housing tax credit recapture. Under Section 42 of the Internal Revenue Code, low-income housing tax credits are allocated to a site annually over a 10-year period. But these tax credits are subject to a 15-year compliance period. This means...
The Fair Housing Act (FHA) prohibits discrimination against persons with disabilities. The law broadly defines “disability” as a physical or mental impairment that substantially limits one or more major life activities. And fair housing law classifies hearing impairments as...
If you’re like most tax credit managers, you probably contact an outside party such as your state housing agency or a tax credit consultant to get guidance when you’re not sure how to handle certain day-to-day management issues. When you get this guidance, it’s a good idea to...
Federal law imposes numerous accessibility requirements that tax credit sites must follow. If your site was designed and constructed after March 13, 1991, you must make your site readily accessible to and usable by people with disabilities. Federal requirements say that all ground-floor and...
The IRS recently released a memo, entitled “Low-Income Housing Credit—Noncompliance Resulting from Conflicting Program,” directed to examiners auditing LIHTC issues. The memo addressed whether a building could continue to qualify as low income under Section 42 of the Internal...
The IRS recently released a memorandum issued by the Office of Chief Counsel dated June 2, 2014, which addressed circumstances that could affect the eligibility of employee units such as manager or maintenance personnel units in a LIHTC site to qualify for the tax credit. Specifically, the memo...
When you verify a household’s income with employers or other verification sources, you may get information that contradicts what household members told you during the household’s certification or annual recertification. For instance, a household member may tell you that he gets $50...
You may want to keep a unit at your tax credit site available as a model to show prospects. But you should be careful about which unit you choose to set aside as your model, and what you do with that unit as occupancy changes occur.
The IRS recently released its new audit technique guide (ATG) for IRC Section 42, Low-Income Housing Credit. The purpose of the ATG is to help IRS examiners audit owners of LIHTC projects. It’s organized in the order an examiner might address issues during an examination, starting with an...
Commercial space isn’t LIHTC basis eligible, but the IRS Code does allow for commercial use at a tax credit site. That commercial space may even be located in the same building where your low-income households live. For example, suppose a 50-unit tax credit building proposes that the...
Many contractors and maintenance workers who have been on the job for years believe they know all about the dangers of and the precautions necessary for working with lead paint. Others think lead paint poisoning simply went away years ago. It didn’t.
Tax credit sites tend to operate on tight margins because of the competition to obtain these credits initially and the allocating agencies’ obligation to provide the minimum amount of credit necessary to make a deal feasible. Given these constraints, it’s no surprise that some sites...
