IRS Ruling Clarifies Criteria for Community Service Facilities in LIHTC Properties
In Revenue Ruling 2003-77, the Internal Revenue Service (IRS) yesterday provided clarification of the criteria for community service facilities in low-income housing tax credit (LIHTC) projects. To be included in project basis, a facility must be designed to serve primarily individuals with an income no higher than 60 percent of area median income. Rev. Rul. 2003-77 says this primary service requirement can be satisfied if the services will improve the quality of life for community residents and the taxpayer demonstrates that the services will be appropriate and helpful to individuals earning 60 percent or less of the area median income (AMI). The ruling also says the facility must be located on the same tract of land as one of the project buildings, and any fees for services must be affordable to individuals at or below 60 percent of area median income.