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IRS ISSUES GUIDANCE RELATED TO LIHTC PROPERTY DISPOSITION

WASHINGTON, D.C. – May 2, 2012

The Internal Revenue Service (IRS) today issued Revenue Procedure 2012-27, which describes how to make the notifications required to begin the three-year statutory period for assessing a deficiency resulting from a reduction in the qualified basis of a low-income housing tax credit (LIHTC) building that occurs after the taxpayer disposes of the building (or an interest therein). The guidance will be published in IRB 2012-21 dated May 21, 2012.

IRS TO ISSUE FINAL QUALIFIED CONTRACT REGULATIONS

WASHINGTON, D.C. – May 2, 2012

The Internal Revenue Service (IRS) will formally publish final regulations tomorrow regarding low-income housing tax credit (LIHTC) qualified contract rules. The final regulations provide guidance concerning LIHTC property owners’ requests to LIHTC agencies to obtain a qualified contract for the acquisition of an LIHTC building. The rules will affect owners requesting a qualified contract, potential buyers and agencies responsible for the administration of the LIHTC program. The final regulations are scheduled to be officially published in the May 3 Federal Register; click here for a copy of the pre-publication version of the final qualified contract regulations. Additional information on qualified contracts and related issues can be found on the Year 15 Hot Topics web page.

Questions about the final qualified contract regulations can be directed to Mike Morrison, CPA, at mike.morrison@novoco.com or (415) 356-8000.

Tune in to the May 8 Tax Credit Tuesday Podcast to hear Michael J. Novogradac, CPA, discuss the guidance and what it will mean for the LIHTC industry.

Join Novogradac & Company and LIHTC experts and practitioners to discuss what lies ahead for the LIHTC program at the Affordable Housing Tax Credit Conference: Meeting the Challenges of 2012, May 17-18, in New Orleans, La.

HUD DESIGNATES 2013 QUALIFIED CENSUS TRACTS

WASHINGTON, D.C. – April 24, 2012

The U.S. Department of Housing and Urban Development (HUD) has designated qualified census tracts (QCTs) for 2013 for purposes of the low-income housing tax credit (LIHTC) under Section 42 of the Internal Revenue Code (IRC). HUD based the 2013 QCTs on new data from the 2010 Decennial Census and the 2006-2010 tabulations of American Community Survey. This is the first time since 2007 that the QCTs have changed substantially, and the 2010 census tract boundaries and numbers may differ from those established in 2000. The 2013 QCTs will take effect on January 1, 2013. The 2012 difficult development areas (DDAs) designated in the October 27, 2011 Federal Register remain in effect. Questions about the QCTs transition rules can be directed to Jim Kroger, CPA, at (415) 356-8000.

Learn more about the benefits of developing in QCTs and DDAs by attending Affordable Housing Tax Credit Conference: Meeting the Challenges of 2012, May 17-18, in New Orleans, La.

GAO RELEASES REPORT ON TAX EXPENDITURES

WASHINGTON, D.C. – March 30, 2012

The Government Accountability Office (GAO) has released a report about measuring the effectiveness of community development tax expenditures including the low-income housing tax credit, new markets tax credit and historic tax credit, among others. The report, titled “Limited Information of the Use and Effectiveness of Tax Expenditures Could Be Mitigated through Congressional Attention,” suggests ways that Congress could improve its ability to assess tax expenditures. The report says that limited data has affected the ability of researchers to provide definitive results about the effectiveness of some community development tax expenditures.

Tune in to next week’s Tax Credit Tuesday Podcast to hear Michael J. Novogradac, CPA, discuss the report and GAO’s recommendations.

IRS RELEASES POPULATION ESTIMATES FOR 2012

WASHINGTON, D.C. – March 26, 2012

The Internal Revenue Service (IRS) today released its 2012 Calendar Year Resident Population Estimates. These figures are used to determine states' 2012 low-income housing tax credit (LIHTC) ceilings and tax-exempt private activity bond caps. Each state's LIHTC ceiling in 2012 is equal to the greater of $2.20 multiplied by the state population or $2,525,000; a state's tax-exempt bond volume cap will be the greater of $95 multiplied by the state population or $284,560,000. Notice 2012-22 includes the population estimates for each state, territory and insular area.

Join Novogradac & Company to discuss what lies ahead for the LIHTC program at the Affordable Housing Tax Credit Conference: Meeting the Challenges of 2012, May 17-18 in New Orleans, La.

UTAH ENACTS LIHTC PROPERTY TAXATION LAW

SALT LAKE CITY, Utah – March 22, 2012

Utah Gov. Gary Herbert last week signed H.B. 75 to require low-income housing tax credit (LIHTC) property owners to annually provide certain information to county assessors. Under the new law, owners must provide rent rolls and a financial operating statement for the prior year, a signed statement that the property continues to meet LIHTC requirements, and financing terms and agreements for the property. Owners who fail to provide this information before April 30 of each year will be subject to a penalty equal to the greater of $250 or 5 percent of the tax due on the property for that year. The law will take effect on January 1, 2013.

DALLAS DISTRICT COURT RULES AGAINST TDHCA IN DISPARATE IMPACT CLAIM

DALLAS, Texas – March 20, 2012

The Dallas Federal District Court today ruled in favor of the plaintiff in a lawsuit that challenged the Texas Department of Housing and Community Affairs’ (TDHCAs’) allocation of low-income housing tax credits (LIHTCs) in the Dallas metropolitan area. The court found that the plaintiff, The Inclusive Communities Project Inc. (ICP), proved its claim under the Fair Housing Act (FHA) that the agency’s allocation decisions have a disparate racial impact, albeit an unintentional one. TDHCA has 60 days to submit a remedial plan to address the FHA violations. There is a possibility that the ruling and the agency’s remedial actions could affect the release of TDHCA’s 2012 LIHTC allocations, according to the Texas Affiliation of Affordable Housing Providers.

To learn more about the ruling’s potential effects on LIHTC allocations in Texas, tune in to the March 27 Tax Credit Tuesday podcast. Questions about the ruling can be directed to George Littlejohn, CPA, at 512.340.0420.

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