Fall 2016 issue of Horizons

REAL ESTATE

Tax Credit Real Estate Developments: Legislative Update by Jonathan A. Davis, CPA

W ith the presidential election around the corner, Republicans and Democrats alike continue to push their opposing agendas. However, there is one issue about which both parties can agree: the need for affordable housing reform. There has been a lot of activity in Washington over the past few months as new bipartisan legislation has been considered by both the House of Representatives and the Senate, including the Affordable Housing Credit Improvement Act of 2016 and the Housing Opportunity Through Modernization Act of 2016 . In addition to this affordable housing reform, the Internal Revenue Service (IRS) has issued long-awaited guidance for the treatment of 50(d) income provided by historic tax credits and renewable energy tax credits.

Affordable Housing Credit Improvement Act of 2016 The Affordable Housing Credit Improvement Act of 2016 was introduced to the Senate by Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT). This bipartisan legislation, first and foremost, calls for a change in program title from the Low-Income Housing Tax Credit (LIHTC) to the Affordable Housing Credit. Second, it increases the annual LIHTC allocation by 50.0% phased in over the next five years. Additionally, it provides for a minimum 4.0% flat rate for the acquisition credit and for projects using bond financing.

page 40 | horizons Fall 2016