Sign Up For Novogradac Industry Alert Emails

Section 236 Payments Not Considered Grants, According to Revenue Ruling

Monday, November 4, 2002 - 1:45AM

Section 236 rental assistance payments and rent supplement payments are not considered grants made with respect to a building or its operation under § 42(d)(5) of the Internal Revenue Code, according to Revenue Ruling 2002-65. As such, under the low-income housing tax credit (LIHTC) program, they do not have to be subtracted from eligible basis. The Internal Revenue Service (IRS) also states that Rev. Rul. 2002-65 does not apply to interest reduction payments made under mortgage insurance programs, and that the Treasury Department and IRS are studying how to treat these payments under §42. Click here for Rev. Rul. 2002-65.

Learn more about Novogradac's expertise and many services