The Internal Revenue Services (IRS) has issued an updated Draft Form 3468 and Draft Instructions for the 2018 tax year. This is the form that taxpayers must submit in order to claim the federal historic tax credit, as well as several other investment and energy credits. Notably, the form answers a significant question coming out of tax-reform — when the Historic Credit was amended to be claimed “ratably” over 5 years. The form indicates that post-2017 historic credits projects not covered by the transition rules will claim the the credit at a rate of 4 percent per year over five years, beginning with the year placed in service. Prior to tax reform, the historic credit was claimed when the project was placed in service. A final release of this form is expected later this month and it is possible, though unlikely, that the draft form and its instructions could be changed
Historic Rehabilitation Category Archives
NH&RA encourages its members to support this important legislation. Sponsors anticipate there is an opportunity to attach the basis adjustment language to a larger legislative package that is likely to move through Congress toward the end of the year. Support for the legislation needs to come from both sides of the aisle to improve its chances of enactment.Read More
Jorjani will serve as ACHP’s first full-time chairman, as the position changed from part-time to full-time with the enactment of the National Park Service Centennial Act in December of 2016.Read More
The National Park Services has published its “Annual Report on the Economic Impact of the Federal Historic Tax Credit for Fiscal Year 2016.” The report, which is produced by Rutgers University with assistance from the National Trust Community Investment Corporation—provides a quantitative analysis of the success of the federal historic tax credit (HTC).
Key findings show that fiscal year 2016 was a record-setting year for historic tax credit use. Activity increased by 32 percent over the last year—the greatest year-over-year increase in the program’s history. A banner year brings the cumulative totals of the credit’s economic impact since 1986 to 42,293 buildings rehabilitated, almost 2.5 million jobs created, and $29.8 billion in federal taxes generated. This last number is particularly significant because it confirms the HTC is a revenue generator for the U.S. Treasury (tax credits issued over this same period total $25.2 billion).
The release of this NPS report is incredibly timely. With pressure mounting for the Republican-controlled Congress to deliver a legislative victory ahead of the 2018 mid-term election season, comprehensive tax reform is now Washington’s top domestic policy objective. Republican leadership is determined to send a tax reform plan to the President before the end of the year. Without frequent and sustained advocacy from constituents over the next several weeks, the HTC is likely to join the many other business tax credits that simply do not make it back into a reformed tax code.
The West Virginia House of Delegates and State Senate approved House Bill 203 which expands the state’s historic tax credit program from 10% to 25% of qualified rehabilitation cost for expenditures made after December 31, 2017. Provisions in the legislation expire on December 31, 2022. West Virginia Governor, Jim Justice, is expected to sign the bill into law. Click here to learn more.
As anticipated, Republican leadership released a tax reform framework intended to guide House and Senate tax writing committees in their drafting of tax reform legislation. The framework does not explicitly preserve the historic tax credit and envisions that most business tax credits will be repealed in order to achieve a 20% corporate tax rate.Read More
While the 9-page “Unified Framework For Fixing Our Broken Tax Code” is silent on many critical details, one key feature is a 20% corporate tax rate. This lower rate potentially creates two snags for the tax-incentivized real estate industry.Read More