How to Use the Averaging Convention to Determine First-Year Tax Credits

If you're managing a tax credit site in the first year of its credit period, it's important to know that the owner may not be able to claim all the credits it expects to for that year. According to IRC Section 42(f)(2), an owner isn't allowed to take the entire credit a building is expected to produce each year in the tax credit program on his tax return for the first year of the tax credit period.