7763. How does nonrecourse financing of rehabilitation expenditures impact the calculation of the credit for rehabilitating old buildings and certified historic structures?Nuco Employeercline202014-07-14T18:07:00Z2014-07-14T18:07:00Z23091765Summit Business Media144207014Site Map/Investments/Real Estate/Old Buildings and Certified Historic Structures2005-01-18T00:00:00ZTaxFactsDefaultArticle122581228-00-tf2.xml1228.00;#1933;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 2What is the credit for rehabilitating old buildings and certified historic structures?5500.00000000000TaxFactsDefaultArticleSBMEDIA\moss-admin2010-01-14T22:08:36Z7763. How does nonrecourse financing of rehabilitation expenditures affect the calculation of the credit for rehabilitating old buildings and certified historic structures?Rehabilitation expenditures include nonrecourse financing in the cost or other basis of the property (for purposes of the rehabilitation tax credit) only if the following occur: (1) the property is acquired by the investor from an unrelated person; (2) the amount of the nonrecourse financing with respect to the property does not exceed 80 percent of the cost or other basis of the property; (3) the financing is not convertible debt; and (4) the financing is borrowed from a “qualified person” or represents a loan from any federal, state, or local government or instrumentality thereof, or is guaranteed by any federal, state, or local government. A “qualified person” is a person who is actively and regularly engaged in the business of lending money and who is not one or more of the following: (1) a person related in certain ways to the investor; (2) a person from whom the taxpayer acquired the property (or a person related to such a person); or (3) a person who receives a fee with respect to the investment in the property (or a person related to such a person). In the case of a partnership or an S corporation, the determination of whether nonrecourse financing is qualified for purposes of the rehabilitation tax credit is made at the partner or shareholder level, respectively.IRC Sec. 49(a)(1).If there is a decrease in the amount of nonqualified nonrecourse financing (not including a decrease through the surrender or similar use of the property) in a subsequent year, the amount of decrease is treated as an additional qualified investment in the property made in the year the property was placed in service. A credit of the applicable percentage of the amount of the increase is taken in the year of the increase. For purposes of determining the amount of the credit or of any subsequent recapture, the investment is treated as made in the year the property was placed in serviceIRC Sec. 49(a)(2). (See Q7764).