16C — February 19 - March 12, 2021 — Property Management — Owners, Developers & Managers — M id A tlantic Real Estate Journal


Property Management

By Michael Pintabone, CPA, Withum Congress and Department of Treasury Grant Relief to LIHTC Communities


ongress recently passed the Consolidated Ap- propriations Act, 2021,

The provisions of this text establish aminimum tax credit percentage and are as follows: • Subsection (b) of IRC Sec - tion 42 is amended to provide an applicable credit percentage for federally subsidized build- ings of not less than 4% • The 30% present value credit now joins its big brother, the 70% present value credit, to establish a credit floor • The 4% tax credit percent - age floor provision is effective for federally-subsidized build- ings as follows: o If financed with tax-exempt bonds:

▪ Placed in service by the taxpayer after December 31, 2020, and ▪ Received a tax credit al - location after December 31, 2020, and ▪ Tax-exempt bonds are is - sued after December 31, 2020 o If not financed with tax- exempt bonds: ▪ Placed in service by the taxpayer after December 31, 2020, and ▪ Received a tax credit alloca - tion after December 31, 2020 With the 30% present value tax credit percentage hitting all-time lows during 2020,

this floor provision can only sweeten the pot for tax credit investors, provide more capital to finance additional afford - able housing units, and help shorten the housing gap. Meanwhile, the IRS recently issued Notice 2021-12, which grants additional relief in three primary areas related to the Low Income Housing Tax Credit (LIHTC): 1. Deadlines related to the credit 2. Operational provisions 3. Deadlines associated with qualified residential rental projects

Some notable provisions from IRS Notice 2021-12 include the following: Relief for deadlines related to the credit 1) 10-percent test for car- ryover allocation If the last day for an Owner of a building with a carryover allocation to meet the 10-per- cent test falls on or after April 1, 2020 and before September 30, 2021, the last day for the Owner to meet the 10-percent test is postponed to the earlier of one year from the original due date or September 30, 2021. Meeting the 10-percent test is critical to preserving a LIHTC allocation from the relevant Agency. 2) 24-month minimum rehabilitation expenditure period If the 24-month minimum rehabilitation expenditure period for a building origi- nally ends on or after April 1, 2020 and before September 30, 2021, the last day for the Owner to incur the minimum rehabilitation expenditures with respect to the building is postponed to the earlier of one year from the original end date or September 30, 2021. An extension of this expenditure period may provide additional Qualified Basis within your LIHTC project. 3) Placed in service dead- line If the deadline for a low- income building to be placed in service is the close of calendar year 2020, the last day for the Owner of the building to place the building in service is postponed to December 31, 2021. This extension will help preserve the Owner’s LIHTC allocation. 4) Extension to satisfy oc- cupancy obligations If the close of the first year of the credit period with respect to a building is on or after April 1, 2020 and on or before June 30, 2021, then the qualified basis for the building for the first year of the credit period is calculated by taking into account any increase in the number of low-income units by the close of the 6-month period following the close of that first year. This provision will help Owners meet quali- fied occupancy projections and avoid deferring 1st year credits and / or claiming a portion of their LIHTC over the 15 year compliance. continued on page 18B

which com- prises 2,100+ p a g e s o f t e x t , wi t h a d i v i s i on d e d i c a t e d to Taxpayer C e r t a i n t y and Disaster Tax Relief .

Michael Pintabone

Included within that division is one small section that is ex- pected to have an enormously positive impact on LIHTC developments.

66 Route 17 N • Suite 900 • Paramus, NJ 07652 201.845.6606 • www.NIAPM.com



66 Route 17 N • Suite 900 • Paramus, NJ 07652-2776



P r o p e r t y M a n a g e m e n t • B r o k e r a g e • I n d u s t r i a l • O f f i c e • R e t a i l • I n v e s t m e n t s If you have the need for highly qualified local Property Managers or are simply curious about what we might be able to do for you, we would love to give you a tour of some of the facilities we own and/or manage, at your convenience. 201-615-2221 • www.nianationalrealty.com NIA National Realty was originally founded as a pure commercial brokerage operation 35 years ago, at the Crossroads of Routes 4 & 17, two of the busiest retail highways in the Country. Our philosophy and focus from the beginning, has been to know as much as possible about the Industrial, Retail, Office, and Investment marketplace, in our very small geography, unlike the multi-national firms, who claim to know everything about everywhere…. We have an edge over all of our competition specifically because we have maintained our boutique size, helping all those we serve, with our combined 100 years of experience in our highly focused marketplace, with all commercial property types. We strive to maximize our client’s assets by encouraging them to do smart transactions at market pricing with our goal being the betterment of real property assets within our geography, for the long term. Further, we both own and manage all of the property types we serve, giving us first-hand insight and a thorough understanding of the motivations of the clients we serve. We have placed more than 700 tenants in our market representing both Tenants and Landlords, and we have sold hundreds of properties when the time calls for a sale, as well.

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