Novogradac Journal of Tax Credits Volume 11 Issue 6
Abridged version of the June 2020 issue of the Novogradac Journal of Tax Credits. For more content, please subscribe to the Journal.
As the nation begins to reduce shelter-in-place restrictions and reopen businesses, the same question is on everyone’s mind: What’s next?
The global COVID-19 pandemic has dramatically affected everything, including the renewable energy tax credit world. This month, we’ll review the state of that world.
Investment in the opportunity zones (OZ) incentive was expected to accelerate in 2020, as the incentive matured and the Department of the Treasury issued final regulations. Then the COVID-19 pandemic hit, the stock market plunged and the economy hit a bump.
While COVID-19 is affecting the global economy, low-income housing tax credit (LIHTC) investors and syndicators say the tax credit equity market is still active.
This issue of the Novogradac Journal of Tax Credits examines the tax equity market for affordable housing, community development, historic preservation and renewable energy tax credits as we near the midpoint of a historic year in America.
The Internal Revenue Service on May 22 published in the Federal Register proposed amendments to Treasury Regulation 1.47-7 concerning the historic tax credit (HTC), including rules to coordinate the new five-year period over which the credit may be claimed with other special rules for investment credit property. The proposed regulations include a general rule for calculating the HTC, definitions of “ratable share” and “rehabilitation credit determined,” and rules coordinating the changes to Internal Revenue Code (IRC) Section 47 with special rules in Section 50 related to dispositions, basis adjustment and income inclusion.
The Community Development Financial Institutions (CFDI) Fund announced April 8 an extension of application deadlines for the fiscal year 2020 rounds of the CDFI program and the Native American CDFI Assistance program, due to the COVID-19 pandemic. The final deadline for all questions, assistance and applications was April 30.
A bipartisan group of six senators sent a letter April 23 to the Department of the Treasury, urging an extension of safe harbor provisions for the renewable energy investment tax credit and production tax credit. The letter asks for a one-year extension–from four years to five years–of the continuity safe harbor for projects that began construction in 2016 or 2017, citing the benefit from that change to “help preserve tens of thousands of jobs and billions of dollars of investments and provide some certainty in these challenging times.”
The U.S. Department of Housing and Urban Development (HUD) announced May 1 the allocation of $685 million in COVID-19 relief funding to public housing authorities (PHAs). The funding is part of the Coronavirus Aid, Relief and Economic Security (CARES) Act and can be used for preparation, prevention and/or response to a COVID-19 outbreak. HUD released a list of PHAs that will receive the aid and the amount each will receive.
The U.S. Department of Housing and Urban Development (HUD) issued two mortgagee letters April 10 concerning property owners with Federal Housing Administration (FHA) and HUD loans. Mortgagee Letter 2020-09 provides the protocol to request mortgage forbearance for FHA loans as provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act. That authority is in effect from March 27 through the end of the year, unless the national emergency declaration is terminated before then.