7752. What is amount of the low-income housing tax credit that can be claimed?Nuco Employeercline202014-07-14T18:11:00Z2014-07-14T18:11:00Z34142363Summit Business Media195277214Site Map/Investments/Real Estate/Low-Income HousingTaxFactsDefaultArticle2005-12-12T00:00:00Z122571227-00-tf2.xml1227.00;#1932;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 2What is the low-income housing tax credit?4500.00000000000TaxFactsDefaultArticleSBMEDIA\bwagner2010-03-10T15:05:05Z7752. What is amount of the low-income housing tax credit that can be claimed?The amount of credit depends on when the property was first placed in service. A letter ruling treated a project as placed in service in the year that a temporary certificate of occupancy was issued for the project and the taxpayer advertised the property as available for occupancy.Let. Rul. 8844062.For property placed in service in 1987, or between July 31, 2008, and December 31, 2013, the credit percentage was 9 percent annually for 10 years for new buildings that were not federally subsidized for the taxable year. The credit was 4 percent annually for 10 years for (1) existing buildings or (2) new buildings that are federally subsidized.IRC Sec. 42(b)(1), before enactment of Housing Assistance Tax Act of 2008, PL 110-289; IRC Sec. 42(b)(2)..For other property placed in service after 1987, the credit percentage is the amount prescribed by the Service for the earlier of (1) the month in which the building is placed in service, or (2) at the election of the taxpayer, (a) the month in which the taxpayer and the housing credit agency enter into an agreement allocating the tax credit to the project, or (b) the month in which certain tax-exempt obligations (described in IRC Section 42(h)(4)(B)) that finance the project are issued. The election described in (2) above is irrevocable and must be made no later than five days after the close of the month elected. The amount that will be prescribed by the Service is a percentage that will yield over a 10-year period an amount of credit with a present value of 70 percent of the qualified basis of new buildings that are not federally subsidized for the year, and 30 percent of the qualified basis of existing buildings and new buildings that are federally subsidized for the year.IRC Sec. 42(b)(1), as amended by Housing Assistance Tax Act of 2008..However, the rules in the preceding paragraph are modified with respect to credits allocated from state housing credit ceilings after 1989 so that a credit is not allowed with respect to the acquisition of an existing building unless substantial rehabilitations are made to the building.IRC Sec. 42(d)(2)(B)(iv). Generally, rehabilitation expenditures within a 24 month period must exceed the greater of (1) $3,000 per low-income housing unit, or (2) 10 percent of the building’s adjusted basis. If such an existing building is substantially rehabilitated, the 70 percent present value credit is available for the rehabilitation portion and the 30 percent present value credit is available for the balance.IRC Sec. 42(e). Furthermore, the credit for an existing building may not begin before the credit for the rehabilitations are allowed.IRC Sec. 42(f)(5).The minimum expenditures requirement of IRC Section 42(e)(3) may be met in less than 24 months, and treated as placed in service at the close of the period in which the requirement is met, but the aggregation period for such expenses may not exceed 24 months.Rev. Rul. 91-38, 1991-2 CB 3.