IRS to Issue Notice of Proposed Rulemaking for LIHTC Average Income Test
The Internal Revenue Service (IRS) will publish in Friday’s Federal Register a notice of proposed rulemaking on low-income housing tax credit (LIHTC) average income test regulations. The proposed regulations would provide that if a project has multiple over-income homes it does not need to meet the next-available-unit rule in a particular order. The proposed regulations would also provide federal flexibility in initially designating units, which needs to occur by the end of the first taxable year. Thereafter, the IRS proposes limits on subsequent changes and a process to address units going offline. Comments on the proposed rule will be due Dec. 29.
These proposed regulations will be discussed in further detail at the Novogradac 2020 Tax Credit Housing Finance Virtual Conference, Dec. 3-4. Novogradac’s LIHTC Working Group will submit comments; click here for more information on how to join.