IRS Provides Safe Harbors for When Residents Exceed Income Limitation

Monday, November 24, 2003 - 1:45AM

The Internal Revenue Service provides safe harbors under which IRS will treat a residential rental unit in a building as a low-income unit if the incomes of the individuals occupying the unit are at or below the applicable income limitation before the beginning of the building's credit period, but exceed that limitation at the beginning of the building's credit period (Rev. Proc. 2003-82). This revenue procedure addresses questions that have arisen regarding when individuals must satisfy the applicable income limitation under §42(g)(1) or §142(d)(4)(B)(i) of the Internal Revenue Code when they move into a residential unit in an existing building under §42(j)(5) on or after the date a taxpayer acquires the existing building for rehabilitation under §42(e), but before the beginning of the first taxable year of the building's credit period under §42(f)(1). The revenue procedure is effective for taxable years ending on or after Nov. 24, 2003. For more information, click here. For a copy of Rev. Proc. 2003-82, click here.

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