Historic Tax Credits/Rehabilitation Tax Credit
The federal Historic Tax Credit Program, created pursuant to Section 47 of the Internal Revenue Code, provides dollar-for-dollar reduction of tax liability to encourage the preservation and rehabilitation of historic properties. Additional tax savings are provided through passive losses generated by the real estate investments. Historic credits are a permanent reduction of current and future tax liability, not a deferral of tax liability.
Historic buildings qualify for either 10% or 20% of qualified rehabilitation expenditures. Joint oversight/approval by the National Park Service and State Historic Preservation Offices are necessary.
HTCs are claimed during the first year, subject to a 5 year compliance period, 20% vesting each year. HTCs provide a dollar for dollar tax credit which is claimed within the first year that investment is made, while other tax benefits, cash, and/or residual are typically earned over a 5 year period.
We work in all areas of the HTC Program; including investment, advisory work with developers and governmental entities to utilize HTCs, fund reporting and asset management.