IRS Announces Procedures for Determining Compliance of Set-Aside Requirements

Wednesday, July 7, 2004 - 1:45AM

The Internal Revenue Service (IRS) this week announced new procedures for determining whether a residential rental project is in compliance with the applicable set-aside requirements during a qualified project period. Revenue Procedure 2004-39 clarifies that the set-aside requirements under either IRC Section 142(d)(1)(A) or IRC Section 142(d)(1)(B, which require a specified percentage of units be leased to low-income tenants, apply to the total number of available units. Also, under certain circumstances, Rev. Proc. 2004-39 says that failure to satisfy the set-aside requirement will not cause the project to not be a qualified residential rental project during a transition period beginning on the issue date of the first bonds.

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