Keeping It Straight

Improve Your LIHTC Vocabulary with the IRS Audit Technique Guide

March 31, 2014    

In January 2014, the IRS released a draft version of the Section 42 Audit Technique Guide. The audit technique guide was prepared to assist IRS examiners audit owners of tax credit sites. The audit technique guide consists of 20 chapters, in nine parts, plus 10 appendices that include case law...

First-Year Fraction vs. Minimum Set-Aside

December 21, 2012    

The “first-year fraction” is the “applicable fraction” for the first year of the compliance period. The applicable fraction is the percentage of a building that’s treated as low-income use and generally eligible for the tax credits as of the close of that year of...

Net Rent vs. Gross Rent

December 21, 2012    

The “net rent” is the amount a low-income household is charged to live in its unit. The “gross rent” is the net rent plus the utility allowance for the unit plus any non-optional fees.

Allocation Date vs. Placed-in-Service Date

August 30, 2012    

The "allocation date" is the date your state housing agency allocated or committed tax credits to the owner for the site. The "placed-in-service" (PIS) date marks the first day the owner can begin qualifying units at the site as low-income units to claim its tax credits.

Credit Period vs. Compliance Period

August 30, 2012    

The "credit period" is the 10-year period during which the owner claims its tax credits. It began either the same taxable year your building was placed in service or the following year.

The "compliance period" is the 15-year period during which you must follow the tax...

Qualified Allocation Plan vs. Compliance Manual

August 30, 2012    

The “Qualified Allocation Plan” (QAP) is a document your state housing agency publishes that contains the selection criteria it uses to award credits. Because the QAP describes how a state housing agency awards credits, it's mainly written for owners. But because your agency'...

Are You LIHTC Fluent?

July 15, 2012    

Test your knowledge of common acronyms used in the low-income housing tax credit industry. On the lines below (or on a blank piece of paper), write down the terms associated with each of the following 50 acronyms. The answers appear on p. 8. This list was provided by Karen Graham of Karen A....

Laws and Rules vs. Private Letter Rulings and Technical Advice Memoranda

July 3, 2012    

The laws and rules governing the tax credit program include Section 42 of the Internal Revenue Code and its regulations, Internal Revenue Service (IRS) Revenue Notices, IRS Revenue Procedures, and IRS Revenue Rulings. The laws and rules are binding on everyone who's involved with a tax...

Empty Unit vs. Vacant Unit

July 3, 2012    

An “empty unit” is a unit that has never been occupied. A “vacant unit” is a qualified low-income unit that's no longer occupied.

It's natural to think that these terms refer to the same concept, since they're normally synonymous, admits tax credit...