historic preservation credits

historic preservation credits

A common name given to the IRS concept of rehabilitation tax credits,allowing tax credits equal to 10 percent of the cost of renovation,reconstruction,and restoration of buildings placed in service before 1936.A larger credit,20 percent,is allowed for certified historic structures.There is a special increase for properties in the Gulf Opportunity Zone (named counties suffering hurricane damage in the 2005 hurricane season) with 13 percent allowed for pre-1936 buildings and 26 percent for certified historic structures.The properties do not need to have suffered any hurricane damage, as long as they are in the specifically named states and counties. See Form 3468,“Investment Credit,”and the attached instructions,available at the IRS Web site, www.irs.gov.

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The final financing package involved not just bonds from Illinois' state housing development authority and affordable housing tax credits, but also federal historic preservation credits that the investors secured by arranging to have the property added to the National Register of Historic Places.
Several other states allow taxpayers to transfer their historic preservation credits, including Delaware, Kansas, and Rhode Island.
Louis who have bought historic preservation credits in the last several years.
Coffin's economic model did "not accurately reflect the added economic impact on local entrepreneurial enterprises, or the so called 'induced' or 'indirect' economic effect" of the historic preservation credits.
98) In other words, a taxpayer who rehabilitates his personal residence cannot use the federal historic preservation credit.
110) An annual cap can distort the purpose of an historic preservation credit by "rewarding projects that do not require an incentive while excluding projects that cannot proceed without the state incentive.
131) For example, a national partnership doing business in Kansas that qualifies for the Kansas historic preservation credit can allocate the tax credit so that it is to be passed through only to its partners in Kansas.
Additionally, the Subcommittee recommended that the percentage of qualified rehabilitation expenditures that may be claimed as a credit be reduced from 25 to 20% for projects in which the historic preservation credit is being used along with the state low-income housing tax credit.
For example, the Virginia building, located on East Broadway in the downtown Columbia Historic District, was rehabilitated using both the Missouri historic preservation credit and the federal rehabilitation credit.

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