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IRS: Pass-through Entity in HTC Transaction Can Be Required to File Form 3468

Monday, October 10, 2016 - 1:15PM

A pass-through entity that is not the owner of a qualified rehabilitated building  but merely acts as a conduit for qualified rehabilitation expenses (QREs) for a historic tax credit (HTC) transaction can be required to file an Internal Revenue Service (IRS) Form 3468, Investment Credit, according to a chief council advice (CCA) memorandum released Oct. 7. In CCA 201641022, the IRS Officer of Chief Council said that even if the conduit entity doesn’t own the rehabilitated building and historic structure and isn’t claiming the credit, the IRS can require reporting from every entity in the ownership chain. The CCA also said the IRS may require a lessor that treats its lessee as having acquired rehabilitated property to provide the lessee with the National Park Service project number and date of the final certification of completed work, so the lessee can properly file Form 3468.

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