On July 21st, the IRS released guidance regarding Internal Revenue Code 50(d)(5). The long-awaited guidance affects market rate transactions involving Historic Tax Credits. As the guidance was released during NH&RA’s Summer Institute, a quick briefing session was delivered on some of the basics:

  • Affects pass-through of tax credits to a master tenant
  • Provides for amortization over the life of the lease
  • The investor absorbs all income
  • Does not increase capital loss at exit
  • Provides for election to accelerate income inclusion outside of the recapture period – of course, it could be a better idea to take this over time, but as was discussed during the session, maintaining records for 30 years can be a challenge

Organizations have already begun announcing events that will cover the guidance:

IPED Forum
August 10, 2016
1:30-6:30pm E.T.
Washington, DC

Novogradac 2016 Historic Tax Credit Conference
September 21-22, 2016
Cleveland, OH

Also, see Novogradac’s current analysis of the issue here.