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Novogradac Journal of Tax Credits Volume 4 Issue 5

The May 2013 issue of the Novogradac Journal of Tax Credits.

Journal cover May 2013


Michael J. Novogradac

Wednesday, May 1, 2013

In his proposed budget for fiscal year (FY) 2014, President Barack Obama recommended the passage of several tax provisions related to affordable housing, community development and renewable energy. Many of the proposals are encouraging, in that they indicate support for important tax credit programs, but in the face of contention and gridlock in Congress it’s hard to tell if any will gain traction. The proposed budget also contains a number of possible changes to funding for the U.S. Department of Housing and Urban Development (HUD), which if enacted would have significant implications for the development of affordable housing.

Julie Treppa

Wednesday, May 1, 2013

You’ve heard about this issue for years: a forgivable loan to a qualified active low-income community business (QALICB) may be characterized as a grant, and grants to QALICBs do not fit within the definition of qualified low-income community investments (QLICIs). Concerns surrounding this issue peaked when the Internal Revenue Service (IRS) published its New Markets Tax Credit (NMTC) Audit Technique Guide wherein it sketched out NMTC transactions for its auditors and stated, “In some instances, as an exit strategy, the CDE may intend to eventually forgive or otherwise not collect on the debt after the end of the 7-year credit period. Loans with such pre-arranged forgiveness options are not bona fide debt for federal tax purposes and, therefore, the investment is not a QLICI…” The NMTC audit technique guide went on to state that “true debt” must satisfy certain factors as set forth in IRS Notice 94-47.

John Leith-Tetrault

Wednesday, May 1, 2013

It’s hard to believe that a tax credit that has done so much to revitalize towns and cities across America could be under such attack. You would think that a Reagan Administration financing incentive that had enabled the rehabilitation of over 38,000 buildings, generated 2.3 million jobs and leveraged $106 billion in rehabilitation expenditures compared to just $20.5 billion in credit allocations, would enjoy natural bipartisan support on the Hill. You would also think that the Internal Revenue Service (IRS) would not compare a congressionally mandated credit like the federal historic tax credit (HTC) to abusive tax shelters, and that the HTC would enjoy the same favorable financial accounting treatment as other 1980s -vintage tax credits such as the low-income housing tax credit (LIHTC).

Forrest D. Milder

Wednesday, May 1, 2013

Last month, The Current discussed how post-closing items can greatly complicate trying to claim an investment tax credit (ITC) or Section 1603 grant, or even result in recapture. In that issue, we looked more closely at Section 1603 grants; this month, we’ll review ITCs and the rest of the issues that are most likely to arise in a renewable energy tax equity transaction, including an important concept: structure risk.

News Briefs

Tuesday, December 4, 2018

The Community Development Financial Institutions (CDFI) Fund released additional resources for CDFI recertification applicants, including recordings of recertification conferences and a frequently asked questions (FAQ) document ...

Wednesday, May 1, 2013

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau released the results of the 2012 Rental Housing Finance Survey in March. The survey presents data on multifamily rental properties, including property...

Wednesday, May 1, 2013

The IRS released the calendar year 2013 resident population figures in April. Notice 2013-15, specifies that the amount for calculating the low income housing tax credits (LIHTC) ceiling is the greater of $2.25 multiplied by the state population, or $2,590,000...

Wednesday, May 1, 2013

The Alabama Department of Commerce released administrative code for the Alabama New Markets Development (ANMD) program. The code covers the rules of the ANMD Act, which became effective Dec. 20, 2012. The ANMD program provides...

Wednesday, May 1, 2013

The U.S. Department of the Treasury on April 3 released inflation adjustment factors and reference prices for renewable electricity production for calendar year 2013. The availability of renewable energy tax credits is determined by inflation adjustment...

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