A private letter ruling (PLR) is a written response issued by the IRS to an owner or taxpayer when the owner asks a question about the tax effects of its acts or transactions. The questions posed by site owners usually entail uncertainty about how to handle a situation and the need for guidance...
If you violate the federal tax credit law and don’t promptly correct the noncompliance, the owner may lose tax credits. Item 11 on IRS Form 8823 (Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition), which is the form the state housing agency uses to report...
Like many tax credit managers, you may have considered setting house rules aimed specifically at children. Your motive may be concern for children’s safety around specific hazards like swimming pools. Or if you’ve been getting noise complaints from residents or have recently found...
When you place ads to fill vacancies or waiting lists at your tax credit site, what those ads say or how they depict your site can greatly influence who responds. For this reason, fair housing advocacy groups pay close attention to ads for rental housing. If you say or depict the wrong thing,...
On March 23, President Trump signed the Consolidated Appropriations Act, 2018 (H.R. 1625), a $1.3 trillion spending bill that funds the federal government through Sept. 30, 2018. In addition to preventing a government shutdown, this omnibus spending bill incorporated two key improvements adopted...
As an owner or manager, it’s important to keep your designated low-income units qualified as such under tax credit rules. Unless a site is deep rent skewed, a LIHTC site must have either 20 percent of the units rent-restricted and occupied by a household with income at or below 50 percent...
IRS Section 42 requires that LIHTC units be maintained in a habitable condition and in a rent-ready state. One issue that repeatedly comes up in many physical inspections of LIHTC sites is the presence of mold and mildew in units. Many sites implement a preventative maintenance program to stop...
When calculating household income at initial certifications and at annual recertifications, if you have a mixed-income site, you must properly count the household’s assets. But this can be tricky if you’re not familiar with HUD’s rules.
The applicable fraction is the percentage of rental units in a building that qualify as low-income units. Specifically, under Internal Revenue Code (IRC) §42(c)(1)(B), the applicable fraction is the smaller of the unit fraction or the floor space fraction. IRC §42(c)(1)(C) defines...
If your site has an elevator, it’s important that your staff know the proper steps to take when a passenger-filled elevator breaks down. Elevators can and do malfunction, more often than most people may like to think, sometimes resulting in injuries. An owner is subject to premises...
As the holiday season approaches, we know that audit season isn’t far behind. Taking steps now to review management practices, household files, and preparing annual forms will help ensure a strong start to the upcoming year and an efficient audit process.
Although you may not be able to prevent many resident-caused fires, other types of apartment community fires are easily preventable. Owners or their maintenance staff should conduct monthly fire inspections of areas and items that are potential fire hazards. If your maintenance staff conducts...
