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45 Cards in this Set
- Front
- Back
What is Placed in Service date of a project that is considered New Construction? |
When the Certificate of Occupancy (CO) is received |
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What is the Placed in Service date of a project that is considered to be an Acquisition? |
Date of purchase |
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What is the Placed in Service date of a project that is considered to be a Rehab? |
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When should the minimum set-aside be met? |
Must be met by the end of the first year of the tax credit period |
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When can an owner place the building in service? |
Building can be placed in service the first year of the tax credit year or the following year |
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Quarterly Owners Certification |
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Compliance Monitoring (Onsite Inspection) |
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Owners Certification of Compliance |
Due every year during the compliance period |
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How long does an owner have to correct Non-Compliance issues? |
State agencies usually give 30-90 days to correct non-compliance issues. The time period can be extended by the state agency in some cases - not commen |
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How long does the State Agency have to report Non-Compliance to the IRS? |
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What form is non-compliance reported to the IRS and owner on? |
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How long does an owner have to certify/qualify residents in an acquisition/rehab property? |
Existing residents must be certified within 120 days of the date of acquisition using the income limits that are in effect on the date of acquisition |
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When an existing tax credit property is acquired in an acquisition/rehab, what income limits are used for existing households? |
Existing tax credit households are certified at the income limit that was applicable when the household was last certified. |
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For an acquisition/rehab property, what income limits are used for new move ins? What is the certification effective date? |
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Form 8586 - Low Income Housing Credit |
Form used when the LIHTC credits are claimed |
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Form 8609 -- Low Income Housing Credit Allocation and Certification |
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Form 8610 - Annual Low Income Housing Credit Agency Report |
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Form 8823 - Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition |
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Form 8611 - Recapture of Low Income Housing Credit |
Form used by owners to recapture tax credits they have previously claimed in past years to the qualified basis of the community being reduced and/or a building being disposed of |
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Form 8693 - Low Income Housing Credit Disposition Bond |
Owners use this form to post bond under Section 42 to avoid recapture of tax credits when they dispose of the building or interest in one |
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Which rule do you follow if you have a property that has several different programs (mixed property)? |
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Who administers the HOME program? |
Home is administered by HUD
Tax Credit is administered by IRS |
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Are federal grants included in eligible basis? |
NO - eligible basis is actually reduced by the amount of the federal grant
Generally get grants to pay for things that are not project expenses such as daycare, library |
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Can a property claim tax credits if they have Tax Exempt bonds? |
Yes if at least 50% of the property and land cost are financed with tax exempt bonds.
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Tax Exempt Bonds |
Bonds issued by a municipal, county or state government whose interest payments are not subject to federal income tax and sometimes also state or local income tax |
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Who is responsible for monitoring the files for Tax Exempt bonds? |
Bond Issuer - State Agency and/or monitoring agencies do not monitor tax exempt bonds
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How is it determined how many tax credits can be allocated by each state? |
Greater of -- $$ multiplied by state population
or
Given dollar amount |
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Qualified Allocation Plan (QAP) |
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Applicable Fraction |
Lesser of:
% of units = Number of LIHTC Units/Total Number of units or % of Square Footage = Square Footage of LIHTC Units/Total Square Footage of all units in the project |
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Eligible Basis |
the cost to construct or rehabilitate the Tax Credit units and the common areas |
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What is included in Eligible Basis? |
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What is excluded from Eligible Basis? |
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What is Qualified Basis? |
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First Year of Credit Period |
Either the year the building is placed in service or the following year
If it is not the year the building is placed in service, owner must elect to defer the credits which is done on the Form 8609 |
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Unit is considered to be qualified when ____________________. |
Occupied by a qualified income eligible household |
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Safe Harbor Rule |
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Can an owner claim acquisition credits without rehab credits?
Can an owner claim rehab credits without acquisition credits? |
No - Owner cannot claim acquisition credits without rehab credits
Yes - Owner can claim rehab credits without claiming acquisition credits |
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Tax Credit Recapture |
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3 things that trigger tax credit recapture |
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Disposition of Property |
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Noncompliance |
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Casualty Loss |
Generally causes a decrease in the eligible basis Caused by damage to a unit or building that makes the unit not suitable for occupancy |
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2 types of Casualty Loss |
Localized - this is damage inside the unit; this can result in Reduction or Recapture Widespread - this type of loss is generally on a large scale caused by an act of nature; is not considered widespread loss unless it is in a Presidentially Declared Disaster area |
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Localized Casualty Loss |
Reduction - there is not recapture if the unit is restored in a reasonable period of time; if it is restored by the end of the taxable year there is not reduction; if it is not restored until sometime in the next taxable year, there is a reduction of tax credits for the months that the unit is being repaired; If the unit is not restored by the end of the 2nd year, this will result in the recapture of tax credits. |
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Widespread Casualty Loss |
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