Check for Five Conditions to Count Unit as Low Income in Monthly Applicable Fraction

Check for Five Conditions to Count Unit as Low Income in Monthly Applicable Fraction



To help the owner of your site determine how many credits it may claim for a building, you must first calculate an “applicable fraction” for each month of the first year of the building’s compliance period. The applicable fraction is the percentage of a building dedicated to low-income residential rental units. Under Internal Revenue Code (IRC) Section (§) 42(c)(1)(B), the applicable fraction is the smaller of the unit fraction or the floor space fraction.

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