When someone agrees to rent or lease an apartment, he signs a lease or rental agreement outlining the terms of the agreement. It’s a legally binding contract between the tenant and the owner that details the rights and responsibilities of each party. Unlike a typical market-rate apartment...
The Consolidated Appropriations Act of 2018 established income averaging as a third minimum set-aside election, and this option happens to be one of the most significant changes to the LIHTC program in recent years. Every tax credit site must meet and maintain a minimum set-aside throughout the...
When performing the initial certification for a low-income household at your tax credit site, it’s easy to make mistakes. These mistakes can jeopardize the owner’s tax credits if your state housing agency finds them during an audit.
A private letter ruling (PLR) is a written response issued by the IRS to an owner or taxpayer when the owner asks a question about the tax effects of its acts or transactions. The questions posed by site owners usually entail uncertainty about how to handle a situation and the need for guidance...
Like many tax credit managers, you may have considered setting house rules aimed specifically at children. Your motive may be concern for children’s safety around specific hazards like swimming pools. Or if you’ve been getting noise complaints from residents or have recently found...
As an owner or manager, it’s important to keep your designated low-income units qualified as such under tax credit rules. Unless a site is deep rent skewed, a LIHTC site must have either 20 percent of the units rent-restricted and occupied by a household with income at or below 50 percent...
When calculating household income at initial certifications and at annual recertifications, if you have a mixed-income site, you must properly count the household’s assets. But this can be tricky if you’re not familiar with HUD’s rules.
The applicable fraction is the percentage of rental units in a building that qualify as low-income units. Specifically, under Internal Revenue Code (IRC) §42(c)(1)(B), the applicable fraction is the smaller of the unit fraction or the floor space fraction. IRC §42(c)(1)(C) defines...
As the holiday season approaches, we know that audit season isn’t far behind. Taking steps now to review management practices, household files, and preparing annual forms will help ensure a strong start to the upcoming year and an efficient audit process.
On Nov. 2, House Republicans unveiled a sweeping tax reform legislation called the Tax Cuts and Jobs Act (H.R. 1). It was introduced by Ways and Means Committee Chairman Kevin Brady. Although its provisions are generally in line with the House Republican Blueprint for Tax Reform released in June...
When a qualified low-income household moves out of a unit at your tax credit site, you might not have another qualified household immediately available to move into the unit. And finding qualified households for your site can be difficult and take time. For these reasons, you may have units that...
At this time of year, as the academic year starts, it may be a good time to review student eligibility restrictions for the LIHTC program. You probably know that, in general, you can’t rent a low-income unit at your tax credit site to a household that’s made up of full-time students...
