What is the vacant unit rule?
Vacant Unit Rule: If a low-income unit in the project becomes vacant, reasonable attempts were or are being made to rent that unit or the next available unit of comparable or smaller size to tenants having a qualifying income before any units in the project were or will be rented to tenants not having a qualifying …
What is the 140% rule?
The Next Available Unit Rule (NAUR) is sometimes termed the 140% Rule or the Available Unit Rule (AUR). Special rules apply when a household’s income increases above 140% of the current applicable income limitation (i.e., 140% above either 50% AMGI or 60% AMGI, based on the minimum set- aside elected for the project).
When should the available unit rule be followed?
The Available Unit Rule under IRC §42(g)(2)(D) states that if the income of the occupants of a low-income unit increases above 140 percent of the income limit (or 170 percent in deep rent skewed developments), the unit will continue to be treated as a low- income unit if the occupants initially met the income …
What is an 8609 form?
More In Forms and Instructions A separate Form 8609 must be issued for each building in a multiple building project. This form can be used to: obtain a housing credit allocation from the housing credit agency, and. certify certain information.
What is an 8823?
The 8823 Form is used when LIHTC noncompliance is identified by a state agency in order to notify the IRS of that noncompliance.
What is Lihtc applicable fraction?
Applicable fraction is the percentage of a building that is treated as low-income use and generally eligible for the LIHC. The applicable fraction is the lesser of the unit fraction or the floor space fraction.
What is eligible basis?
“Eligible basis” is the total amount of development cost that would be eligible for generating Section 42 tax credits if all of the housing units are used for low-income housing. Costs that may be included in the LIHTC eligible basis must be depreciable.
What is the governing regulation for the LIHTC program?
The LIHTC regulations are at 26 CFR part 1, section 42. LIHTC units must be suitable for occupancy by low income households. The regulations determine suitability for occupancy by taking into account local health, safety, and building codes.
Who files Form 8823?
authorized housing credit agency
Any authorized housing credit agency that becomes aware that a low-income housing building was disposed of or is not in compliance with the provisions of section 42 must file Form 8823.
How long must first year tax credit files be retained?
six years
The records for the first year of the credit period, however, must be retained for at least six years beyond the due date (with extensions) for filing the federal income tax return for the last year of the compliance period of the building.