Novogradac

The House of Representatives last week passed budget reconciliation legislation that includes significant tax incentive provisions. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Peter Lawrence, Novogradac's chief public policy officer, discuss the bill, including what provisions were included, which were left out (but could be added as the Senate considers the legislation) and the timeline for the landmark bill going forward. They take a deeper dive into provisions concerning opportunity zones (OZ) and the low-income housing tax credit (LIHTC) that were part of the House bill, along with a significant rollback of clean energy incentives. They also discuss the possibility of provisions relating to the new markets tax credit (NMTC) and historic tax credit (HTC) being added to the bill in the Senate.

The opportunity zones (OZ) incentive remains a versatile tool in the workshop of community development, housing production and renewable energy generation. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Brent Parker, CPA, discuss the intersection of the OZ incentive with other tax incentives, including renewable energy tax credits (RETCs) such as the investment tax credit (ITC) and production tax credit (PTC), low-income housing tax credits (LIHTCs), new markets tax credits (NMTCs) and historic tax credits (HTCs). Parker and Novogradac discuss some of the benefits and challenges of combining OZs with these other financial tools, including discussing various types of transaction structures. The two talk about the possibilities for the incentive before the Dec. 31, 2026, expiration to realize capital gains, which may see an extension after its inclusion in the U.S. House of Representatives Ways and Means Committee's reconciliation budget proposal this week.

Michael Novogradac, CPA, and Novogradac partner Lance Smith, CPA, discuss the opportunities, risks, and challenges faced by for-profit housing developers when partnering with not-for-profit affordable housing developers. Learn about the benefits, such as improved chances of being awarded low-income housing tax credits, lower property taxes and access to soft financing. They also discuss the risks including tax-exempt use property and the material participation standard. Dive deep into the intricacies of joint ventures and gain insights from the recently released Novogradac Nonprofit Housing Developers Handbook.'

The past, present and future are all relevant in new markets tax credits (NMTCs) in the spring of 2025, with multiple issues that touch on each of the three time periods among some of the hottest topics in the tax credit community. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, is joined by guests Rebecca Darling, CPA, and Brad Elphick, CPA, to discuss five key issues of interest in the community. First, the trio discusses a March 14 executive order by President Donald Trump that stoked concerns as to the future status of the Community Development Financial Institutions Fund (CDFI) Fund, which administers the NMTC. Next, Darling, Elphick and Novogradac discuss the looming expiration date for the NMTC and the status of advocacy efforts to make the NMTC permanent. Third, Darling and Elphick share their thoughts on the ongoing 2024-2025 "double round," a $10 billion allocation round. The fourth topic covers qualified equity investment and qualified low-income community investment data so far in 2025. Finally, the host and guests discuss a recently released frequently asked questions (FAQ) compliance document from the CDFI Fund about NMTCs and what the community needs to know.

The U.S. Department of Housing and Urban Development (HUD) released the annual rent and income limits April 1 for property managers to apply when renting properties financed by low-income housing tax credit (LIHTC) equity as well as HUD programs such as Section 8, Section 202 and Section 811. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Thomas Stagg, CPA, one of Novogradac and the nation's leading experts in rent and income limits, discuss three key takeaways from this year's release. First, Stagg and Novogradac discuss income limits being higher than anticipated. The second key takeaway is why the rent and income limits were higher'a change in HUD's methodology for calculating inflation factor in rent and income limits. Finally, they discuss a number of metropolitan statistical areas (MSAs) that were reorganized or changed in the 2025 limits release, including why a disproportionate number of the changes are in Connecticut.

This Tax Day episode of Tax Credit Tuesday features guest host Tony Grappone, CPA, and guest Reza Karim, CPA. They discuss state and local tax issues vital to renewable energy facilities, including various types of taxes such as property, sales and use taxes. They also delve into tax credit transfers, nexus, apportionment and non-resident withholding, providing practical tips and insights for managing these complex tax landscapes. They highlight the importance of early planning and engagement with local jurisdictions to optimize tax outcomes.

Novogradac's e-learning platform'NovocoTraining'provides webinars and on-demand training for myriad community development tax incentives, with teaching for audiences from beginner to expert. In this week's Tax Credit Tuesday episode, Michael Novogradac, CPA, and Wayne Michael, Novogradac's senior director of external education and e-learning, discuss the options available. They discuss how it works, as well as how Michael uses visuals to teach important concepts. They also talk about who makes up the presenters and the typical audience, special certifications and some new options, including a significant change in how to become an "all-you-can-eat" member.

After 10 weeks of the second Trump administration, funding and staffing changes continue to develop for affordable housing funded by the U.S. Department of Housing and Urban Development (HUD) and for the public housing authorities (PHAs) that oversee much of that spending. On this week's episode of Tax Credit Tuesday, host Michael Novogradac, CPA, discusses HUD-related issues with Peter Lawrence, Novogradac's chief public policy officer, and Rich Larsen, CPA, who leads the company's public housing authority practice. They look at how the federal government's continuing resolution funding package for fiscal year 2025 affected HUD spending, then look at issues in the fiscal year 2026 funding plans. After that, they discuss how the reduction in the HUD workforce and field offices affect PHAs and others, before wrapping up with a look at how cuts to the Green and Resilient Retrofit Program funding are playing out and what we know now that we didn't know on inauguration day.

Compliance requirements come in a variety of shapes and sizes for affordable rental housing property managers using incentives such as the low-income housing tax credit (LIHTC), HOME Investment Partnerships Program, tax-exempt bonds, project-based rental assistance (PBRA) programs, public housing and property tax exemptions. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Stephanie Naquin discuss the three key steps when qualifying tenants to live in affordable housing properties: Screen, verify and certify. Later, Naquin and Novogradac discuss the emerging issues around property tax exemption compliance.

In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Novogradac partner Tony Grappone, CPA, delve into essential strategies for reviewing tax returns for renewable energy partnerships during tax season. They discuss pivotal areas such as comparing tax return drafts to key documents, federal and state tax differences, and proper allocation of losses and income. They highlight key services such as financial projections, cost segregation and appraisals. The episode also covers the importance of investor review, state-return specific issues and ensuring compliance with new tax credit requirements under the Inflation Reduction Act.

Twinning or sidecar financing that pairs the federal historic rehabilitation tax credit (HTC) with other tax incentives can be a crucial strategy to finance the renovation and redevelopment of some the nation's historic buildings. In the latest episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Michael Kressig, CPA, discuss some of the benefits and hurdles that come with blending federal HTCs with other tax incentives such as the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), opportunity zone (OZ) incentive, renewable energy tax credits (RETC) and state HTCs. Novogradac and Kressig discuss how often each of the various incentives is used in combination with the federal HTC as well as how often Kressig sees transactions with three or more of the subsidies.

Localities'whether cities, townships or counties'are crucial "partners" in low-income housing tax credit (LIHTC) transactions. While not an actual member of the partnership, localities play a major role in the ability to fund affordable housing properties. In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Mark Shelburne, a housing policy consultant at Novogradac, discuss the roles localities play in LIHTC-financed housing, both for them and for the developers who work with them. They begin by discussing the various ways localities are involved in those transactions, then discuss how they play a role in funding the property, including what to avoid. After that, Novogradac and Shelburne examine nonfinancial ways that localities can help and the role of localities in helping properties meet timelines and deadlines.

Two important financing options when building affordable housing are 4% and 9% low-income housing tax credits (LIHTCs). In the latest episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Charlie Rhuda, CPA, discuss developers that chose to combine the incentives in a single development, sometimes called "sidecar financing" due to the nature of the financing structure. They provide an overview of the difference between the financing tools and discuss why affordable housing professionals would combine them. Later, Rhuda identifies four types of challenges that can arise for those using the sidecar financing model to develop affordable housing.

Michael Novogradac, CPA, and Tony Grappone, CPA, dive deep into the latest trends in renewable energy tax credit (RETC) financing. In this episode of Tax Credit Tuesday, they discuss the most common structures from 2024, including partnership flips, T flips, and inverted leases and their popularity in the market. They also cover the types of projects funded, like solar and battery storage, investor types (direct vs. syndicated) and pricing trends. They share insights from analyzing over 50 deals worth $12 billion in CapEx and $4.6 billion in tax equity investment. Additional topics include technology-neutral tax credits post-Inflation Reduction Act (IRA), metrics for evaluating investments and future market expectations.

Legislation to modernize and renew the opportunity zones (OZ) incentive in 2025 is essential to its long-term prospects. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Jason Watkins, CPA, discuss the path forward for OZs under potential tax law changes. They discuss the political outlook and priorities under a Republican Party that holds the White House, Senate and House. They discuss the push for an extension to the incentive. Later, Novogradac and Watkins discuss modernization and statutory proposals for OZs, including reporting requirements, investment in rural OZs and reinvesting gains in new businesses. Finally, they talk about how the outlook for permanency for the incentive might look.

The 2025 application period for affordable housing properties to receive a 20% "adder" to the 30% investment tax credit (ITC) for solar power opened in January. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Dirk Wallace, CPA, discuss the use of solar-generated electricity at affordable housing properties, including how to evaluate whether solar works at your property, how President Donald Trump's executive orders affect the awarding of bonus credit percentage, how to apply for the "adder" and what properties are eligible. They also discuss the demand for the "adders" and how to demonstrate benefits to tenants.

After chatter about budget cuts during the campaign from several members of President Donald Trump's new administration, stakeholders in the affordable housing community watch attentively as developments arise in Washington, D.C. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA; Rich Larsen, CPA; and Peter Lawrence, Novogradac's director of public policy and government relations, look at what may be in store for affordable housing through the prism of the U.S. Department of Housing and Urban Development (HUD). First, the trio discusses what might be ahead under Scott Turner, Trump's nominee for HUD secretary. Next, Lawrence and Larsen explore what some of the potential upsides for HUD might be under the new administration. Later, Larsen details challenges that may be on the horizon and how public housing authorities can act now to navigate possible shortfalls.

With a major federal tax bill anticipated in 2025 and a newly seated Congress, Michael Novogradac, CPA, and Novogradac Director of Public Policy and Government Relations Peter Lawrence look ahead to four new federal tax incentives that could be introduced in 2025. In addition to discussing each of the four proposed incentives'the preservation tax incentive, Neighborhood Homes Tax Credit, Workforce Housing Tax Credit and Office Conversion Tax Credit'Lawrence provides insight into which members of Congress may sponsor each of the various bills as well as what the legislative path forward for each looks like.

Rental income and operating expenses both set records and increased at rates higher than the consumer price index for housing in 2023, according to data in the 2024 Novogradac Operating Income and Expenses Report. In this week's podcast, Michael Novogradac and report author Kelly Gorman, a partner in Novogradac's Clark, New Jersey, office, discuss the findings of the report and what affordable housing operators should learn from them. They look at the overall increases, then drill down on specifics about property insurance, repairs and maintenance and utility expenses, including what caused increases and whether trends were likely to continue in 2024 and 2025. They also look at the effect of U.S. Department of Housing and Urban Development (HUD) rent and income limits and discuss expense categories that vary depending on geography.

Michael Novogradac, CPA, and Tony Grappone, CPA, continue their discussion on the top 10 tax issues renewable energy developers and investors should address with their tax accountants with this follow-up to the Dec. 17, 2024, episode. In Part 2, they cover the next five critical topics: assessing positive taxable income, ownership flips, revisiting cash waterfalls, tax credit recapture events and ownership changes during the year. This episode provides essential insights for managing the operational and disposition phases of clean energy projects, ensuring compliance and optimizing tax strategies.

Michael Novogradac, CPA, and Tony Grappone, CPA, discuss essential topics for renewable energy developers and investors to address with their tax preparers. They cover the first five of 10 key issues for renewable energy developments: placed-in-service date determination, tax depreciation conventions, comparing financial projections with actual results, whether a deficit restoration obligation is in place, and state and local tax considerations. This episode emphasizes the importance of preparing for a smooth tax season and avoiding costly pitfalls, providing valuable insights for both new and seasoned professionals in the renewable energy sector.

As 2024 nears its conclusion, Michael Novogradac, CPA, interviews Christina Apostolidis, CPA, to discuss year-end financial reassessments for affordable housing professionals. The episode of Novogradac's Tax Credit Tuesday podcast focuses on comparing actual performance to projected tax credit delivery. Novogradac and Apostolidis highlight three key areas to revisit: placed-in-service dates, lease-up status and updating expected eligible basis, all crucial for maximizing tax credits. Apostolidis, who will chair the Novogradac 2025 Affordable Housing Developers Conference in Florida next month, offers insights on managing these components effectively as the year ends. The episode is part of the "So You Want to Be a LIHTC Developer" series aimed at educating those in affordable rental housing finance.

The Community Development Financial Institutions (CDFI) Fund opened the calendar year 2024-2025 new markets tax credit (NMTC) application period Nov. 19, beginning a process that will result in a record $10 billion in NMTC allocation authority next year.' In this week's Tax Credit Tuesday podcast, guest host Brad Elphick, CPA, and Novogradac partner Rebecca Darling, CPA, discuss the application timing and what to expect in the record allocation round. They begin by discussing how the application works and is scored, then look at various deadlines before turning to changes in this year's application. After that, they talk about how a $10 billion round will be different, including a rapid-fire, six-question back-and-forth, before finally looking at what community development entities (CDEs) and the businesses that receive NMTC financing should be doing now.

Michael Novogradac, CPA, and Novogradac partner Tony Grappone, CPA, examine the complexities of year-end financial statement audits for renewable energy companies. They outline critical steps to ensure a seamless audit process, including the review of prior audits, identification of common errors to avoid and management of non-recurring items. Additionally, they provide guidance on proportional amortization accounting for new investors and emphasize important financial reporting deadlines for developers. This discussion is particularly beneficial for renewable energy accountants preparing for the forthcoming year.

An apparent sweep by Republicans of the White House and both chambers of Congress in the Nov. 5 election has major implications for community development tax incentives such as the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), historic tax credit (HTC), renewable energy tax credits (RETCs) and the opportunity zones (OZ) incentive. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Peter Lawrence, Novogradac's director of public policy and government relations, discuss the election's outcome and preview what to expect in coming months. They begin by looking at the chances for community development tax incentives to be included in year-end legislation, then examine who will lead tax-writing committees in the next Congress before moving on to the reasons and chances for the "Super Bowl of taxes." After that, they examine the outlook for various tax incentives in tax legislation. Novogradac and Lawrence will co-host a special webinar on the election results Nov. 19.

Financial forecasts are essential for every affordable housing developer to anticipate expenses, cash flow and access to capital to build or redevelop properties, including developments built using low-income housing tax credit (LIHTC) equity. In the latest installment of the Novogradac Tax Credit Tuesday podcast's recurring "So You Want to Be a LIHTC Developer" series, Michael Novogradac, CPA, and Miao Xue, CPA, delve into six ways that developers can enhance the benefits of financial forecasts. Novogradac and Xue introduce credit adjusters and twinning LIHTCs with renewable energy investment tax credits (ITCs) as well as digging deeper into four areas'development budget and eligible basis schedule, sources and uses and 15-year cash flow waterfall, the taxable income and loss schedule, and income and loss allocations and the Section 704(b) capital schedule'covered in a previous financial forecast-focused installment of "So You Want to Be a LIHTC Developer."

Michael Novogradac, CPA, and Novogradac director of multifamily property compliance Stephanie Naquin discuss pressing issues in low-income housing tax credit property (LIHTC) compliance. The discussion covers four key topics: the average income set-aside test (AIT) and its implementation challenges and solutions; the Housing Opportunity Through Modernization Act (HOTMA) and its compliance implications; handling casualty losses at housing credit properties, with a focus on presidentially declared disaster areas; and a comprehensive end-of-year compliance checklist for property owners to avoid non-compliance.

Two of the three major factors that determine fiscal year (FY) 2025 rent and income limits for low-income housing tax credit (LIHTC)-financed properties were recently released, giving a preview of what to expect when those limits are announced next April by the U.S. Department of Housing and Urban Development (HUD). In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Thomas Stagg, CPA, discuss those income limits, including what factors are involved in the calculation, what we know so far, how having a good estimate can assist developers and property managers and how HUD's projections for 2023 national median household income lined up with the data from 2023. They also discuss what's new with fair market rents, California's recently passed rent control legislation and which dates to remember between now and the release of FY 2025 income limits.

The deadline to defer capital gains by investing in a qualified opportunity fund (QOF) is Dec. 31, 2026. In this week's episode of Tax Credit Tuesday, host and Novogradac managing partner, Michael Novogradac, CPA is joined by Novogradac partner Jason Watkins, CPA , to discuss the looming deadline, its ramifications and what the possibilities look like for renewal and extension of the opportunity zones (OZ) incentive. They discuss possible passage in the "Super Bowl of Tax" in 2025, how different election outcomes could shape the path forward for the incentive and which representatives could sponsor the legislation. They discuss the possible of a change in the capital gains tax rate. They conclude by discussing ways members of the OZ incentive community can get engaged to push for renewal and extension. Additionally, Novogradac also celebrates the 35th'anniversary of the company founded Oct. 17, 1989.

The Community Development Financial Institutions (CDFI) Fund announced in September awardees for the calendar year (CY) 2023 round of new markets tax credit (NMTC) allocation, providing $5 billion in allocation authority to 104 community development entities (CDEs). In this week's podcast, Michael Novogradac, CPA, is joined by Novogradac partners Rebecca Darling, CPA, and Brad Elphick, CPA, to talk about the awards and the upcoming combined $10 billion CY 2024-2025 round. They discuss high-level takeaways from the awards, including a record low number of first-time awardees, then look at what CDEs and low-income community businesses should be doing before turning to the timing of the combined round and the need for CDEs to be certified by the CDFI Fund.

Financial forecasts are a fundamental part of financing and developing any clean energy facility, particularly for evaluating investor and sponsor returns. This installment of the Renewable Energy Tax Credit Finance series delves into the key do's and don'ts of clean energy financial forecasts. Michael Novogradac, CPA, and Novogradac partner Tony Grappone, CPA, discuss valuable tips for construction costs, operational expenses, debt and equity sizing, and tax benefit analysis.

The first tax season to claim the elective pay incentive, sometimes called "direct pay," from the Inflation Reduction Act (IRA) of 2022 took place earlier this year. In this week's episode of Tax Credit Tuesday, host and Novogradac managing partner, Michael Novogradac, CPA is joined by Novogradac partner Alvin Lee, CPA , to review lessons learned from the incentive's first tax season. The conversation reviews the details of the incentive, which credits are available for direct pay and who can apply for it. Next, the conversation covers the reasons a taxpayer might opt for the elective pay option over other possibilities such as renewable energy tax credit (RETC) transfer. The conversation moves into two evolving issues facing the incentive around what qualifies as domestic content as well as the Jan. 1, 2025, switch for the solar investment tax credit (ITC) to a tech-neutral credit. Finally, the two discuss lessons learned from the first year of the incentive's tax season to apply to the 2025 season.

The tax credit equity market is affected by a variety of factors'and several looming factors could create upward or downward pressure on the pricing for low-income housing tax credits (LIHTCs), new markets tax credits (NMTCs), historic tax credits (HTCs) and clean energy tax credits. In this week's Tax Credit Tuesday podcast'the second of a two-part series'Michael Novogradac, CPA, discusses the issues that could affect equity pricing with three Novogradac partners: Brad Elphick, CPA; Tony Grappone, CPA; and Dirk Wallace, CPA. They begin by looking at how proposed Community Reinvestment Act (CRA) regulations might impact their respective credits, then look at the Basel III and Global Minimum Tax proposals and how they could affect tax credit equity markets. After that, they examine generally accepted accounting procedure (GAAP) regulations, as well as how proposed legislation could impact the markets and wrap up with what proposed tax law changes would have the greatest positive effect in the areas in which they work.

The tax credit equity markets for the federal historic tax credit (HTC), new markets tax credit (NMTC), low-income housing tax credit (LIHTC) and clean energy tax credits account for billions of dollars each year in investment in community development around the nation. In this week's Tax Credit Tuesday podcast'the first of a two-podcast series'Michael Novogradac, CPA, discusses the markets and their intersections with three Novogradac partners: Brad Elphick, CPA; Tony Grappone, CPA; and Dirk Wallace CPA. They examine pricing trends for HTCs, NMTCs, LIHTCs and clean energy tax credits, as well as what factors are playing a role in those trends and how each market affects the others. They then look at how the transferability and refundability provisions for clean energy tax credits under the Inflation Reduction Act of 2022 have affected all the markets. They wrap up with a preview of Part 2 of the series, which will deal with factors that will affect future pricing of tax credit equity.

In this episode of Tax Credit Tuesday , Michael Novogradac, CPA, and Tony Grappone, CPA, discuss the upcoming transition to technology-neutral clean energy tax credits. They provide an overview of the new technology-neutral clean energy investment tax credit (ITC) and production tax credit (PTC) rules taking effect on Jan. 1, 2025, and how different types of facilities qualify. They delve into the implications of the Inflation Reduction Act of 2022 and the stringent criteria for various technologies to qualify for the tech-neutral credits. Tony also shares ways to secure safe harbor provisions and insights on the shifting landscape of renewable energy finance. Tune in to learn how to prepare for these significant changes in the clean energy sector.

In mid-July, the Community Development Financial Institutions (CDFI) Fund announced that it would combine the calendar year (CY) 2024 and 2025 new markets tax credit (NMTC) allocation award rounds into a single $10 billion round. In this week's podcast, Michael Novogradac, CPA, and Brad Elphick, CPA, the head of the New Markets Tax Credit Working Group, discuss the announcement and its implications. They begin by looking at the possible timing of the CY 2023 awards announcement, then look at the possible timing of the opening of the CY 2024-2025 round before examining the number of awards and award sizes to expect from a $10 billion round, as well as the investor appetite for such a round. After that, they discuss the New Markets Tax Credit Working Group recommendations to the CDFI Fund, tips for community development entities (CDEs) and businesses interested in NMTC financing and resources for listeners.

On July 30, 2024, the Senate Finance Committee invited four financial experts to testify at the Tax Tools for Local Economic Development hearing, including Tax Credit Tuesday host and Novogradac managing partner, Michael Novogradac, CPA. In this 76-minute episode of Tax Credit Tuesday, Novogradac is joined by Novogradac partners John DeJovine, CPA, Brad Elphick, CPA, and Jason Watkins, CPA, to expand upon issues and questions discussed during the Senate hearing regarding the historic tax credit (HTC), new markets tax credit (NMTC) and the opportunity zones (OZ) incentive. The group discusses the legislative outlook for the various incentives, how the economic development tools can be combined with other incentives and issues specific to each incentive.

In this Tax Credit Tuesday episode, Michael Novogradac, CPA, and Novogradac partner Charlie Rhuda, CPA, dive into the intricacies of accessing 4% low-income housing tax credits and tax-exempt bonds in a competitive market. As part of their 'So You Want to Be a LIHTC Developer' series, they discuss the basics, provide historical context, and offer practical strategies to enhance the economic benefits of such financing. The episode also covers challenges developers face in obtaining bond financing and essential tips for competing effectively in this space. Featuring real-world examples and expert insights, this episode is packed with valuable information for both new and seasoned LIHTC developers.

In this episode of the Tax Credit Tuesday "So You Want to be a LIHTC Developer" series, Michael Novogradac, CPA, and guests Novogradac partner Susan Wilson, CPA, and Novogradac principal Robert Bennett, CPA, delve into the critical benefits of low-income housing tax credit (LIHTC) audits. This episode focuses on six ways audits provide value to LIHTC owners and developers, including eligible basis calculation, tenant compliance, first-year credit optimization, cash waterfall distributions and analytical review procedures. Learn how specialized expertise can enhance decision-making, sustain property feasibility and save time and money for developers and stakeholders in the affordable housing sector.

Year 15 marks the conclusion of the initial compliance period for a low-income housing tax credit (LIHTC) property, a milestone that brings tax complexities for the investor and the developer. In the latest installment of Novogradac's Tax Credit Tuesday podcast series, "So You Want to Be a LIHTC Developer," Michael Novogradac, CPA, and Kevin Wilson, CPA, discuss accounting issues around Year 15. First, they discuss the ways investors and developers report LIHTC transactions on their generally accepted accounting principles (GAAP) statements, discussing the differences between approaches such as the equity method, proportional amortization and consolidations. They also discuss issues facing investors and developers such as impairment, exit taxes and resyndications.

Year 15 is a crucial period in the life cycle of a property financed by low-income housing tax credit (LIHTC) equity, one filled with significant decisions by the property owner and their investor partner. In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Novogradac partner Nicolo Pinoli, CPA, discuss some crucial issues, including the right of first refusal (and related tax issues), the qualified contract process and resyndication. In the discussion, they examine some of the assertions and some potential challenges to different approaches, including what could motivate developers to pursue different outcomes.

Developing affordable rental housing with low-income housing tax credits (LIHTCs) is a process that can take multiple years, from conception to placing in service, beginning operation and beyond. In this week's episode of Tax Credit Tuesday, guest host Dirk Wallace, CPA, and Karie McMillen, CPA, provide an overview of the stages of the development process, from forming a partnership to annual compliance and many other stops along the way. First, they discuss the most common financing structure for a LIHTC development. With that scope established, McMillen details 11 key moments during the development process, discussing several in greater detail. Finally, the two share insights for developers who are just getting started in the development process.

Under the Inflation Reduction Act of 2022, certain energy facilities can qualify for a 10% bonus tax credit for solar, onshore wind and battery projects that have a minimum amount of domestic content. The IRS in May released new guidance making it easier to determine whether a project qualifies for the bonus credit. In this episode of Tax Credit Tuesday, guest host Brad Elphick, CPA, and Tony Grappone, CPA, dive into the recent domestic content bonus credit guidance for renewable energy projects. They discuss implications for developers, investors and lenders, as well as how Novogradac can provide agreed upon procedures services to help project partners assess whether there are any issues in the way of a facility meeting the domestic content criteria.

With five months until the general election, possible outcomes are varied'and the stakes are high for community development stakeholders. In this week's Tax Credit Tuesday, Michael J. Novogradac, CPA, and Peter Lawrence, Novogradac's director of public policy and government relations, discuss why this election is so important and the effects of different possible outcomes on community development tax credits. They begin by talking about the expiring provisions and why tax legislation is almost certainly on the agenda for the next Congress, then they look at the state of the races for president, the Senate and House of Representatives. After that, they examine each scenario and what each might mean for community development tax incentives.

Year 7 marks the end of the compliance period for a new markets tax credit (NMTC) transaction, marking seven years since an investor made its qualified equity investment into a community development entity (CDE). In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Greg Clements, CPA, discuss the most-common type of Year 7 NMTC exit, the put-call structure. After defining the structure, Novogradac and Clements outline the roles and viewpoints of the investors, qualified active low-income community businesses (QALICBs) and CDEs during a Year 7 exit. Later, Clements gives his perspective on the value of planning, timing and communication between the parties.

Property compliance is multilayered for owners and managers of low-income housing credit (LIHTC) properties, with complexity increasing for mixed-income properties, which are properties whose renters make up to varying levels of the area median income, often including market-rate apartments. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA , and Stephanie Naquin, HCCP, COS , delve into compliance for mixed-income properties that use the LIHTC. They discuss the definitions of 100% affordable housing and mixed-income housing, recertifications, the next-available-unit rule and more.

The Inflation Reduction Act of 2022 reduced the base rate of the then-26% renewable energy investment tax credit to 6% for renewable energy projects. Few projects are financially viable with just the 6% credit, but projects can qualify for a 30% credit if they satisfy two criteria: prevailing wage and apprenticeship (PWA) requirements. In the latest installment in Tax Credit Tuesday's recurring Renewable Energy Tax Credit Finance series, Michael Novogradac, CPA, and Tony Grappone, CPA, discuss the credits and technologies to which PWA criteria apply, how to meet PWA criteria and how to provide investors comfort with PWA compliance.

Eligible basis is a foundational factor to determine the maximum amount of low-income housing tax credits (LIHTCs) generated by an affordable housing property. In this week's podcast, Michael Novogradac, CPA, and Mark Shelburne, a Novogradac housing policy consultant, discuss the fundamentals of eligible basis and the implications for properties ahead of a special six-part online course offered by Novogradac. They examine the purpose of that course series, then look at the role eligible basis plays in determining the tax credit allocation amount. After that, they look at the challenges in determining what parts of an affordable housing development are depreciable and what constitutes eligible basis, including examples of challenges faced. They wrap up by talking about opportunities to learn more about the nuances of eligible basis.

Many developers are familiar with the challenges when using historic tax credits (HTCs) to preserve America's history, including issues such as climbing interest rates, rising insurance rates and increasing costs of construction and labor. In this week's episode of the Novogradac Tax Credit Tuesday podcast, Michael Novogradac, CPA , and John DeJovine, CPA , discuss gap financing solutions for developers involved in historic preservation. First, the conversation covers the use of bridge loans, tax increment financing (TIF), payment in lieu of taxes (PILOT), property assessed clean energy (PACE) funds and other state, local and municipal sources of financing. Later, Novogradac and DeJovine discuss how the HTC pairs with other affordable rental housing and financing community development using such incentives as the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), opportunity zones (OZ) equity, and renewable energy incentives such as the production tax credit (PTC) and investment tax credit (ITC).

The U.S. Department of Housing and Urban Development (HUD) released 2024 rent and income limits earlier this month'limits that determine renter eligibility for HUD-assisted programs and for properties financed by low-income housing tax credit (LIHTCs). The limits also determine the maximum rents that owners of LIHTC properties can charge tenants. In this week's podcast, Michael Novogradac, CPA, and Novogradac partner Thomas Stagg, CPA, discuss the rent and income limits. They look at key takeaways, how the new 10% ceiling affected limits, what geographic areas saw income limit growth that was below the national average of 6% or decreased and how the income limits affect (or don't affect) HERA special properties. They also look to what to expect in 2025 and key dates for data release that will affect those 2025 limits.

In the latest installment in Tax Credit Tuesday's recurring Renewable Energy Tax Credit Finance series, Michael Novogradac, CPA, is joined by Tony Grappone, CPA to discuss final regulations concerning the elective pay option for certain renewable energy investment tax credits. The Internal Revenue Service published the final regulations in the March 11 Federal Register to adopt and codify temporary regulations issued in June 2023, with slight modifications. Learn about the elective pay final regulations, how they differ from the temporary regulations, potential penalties for excessive payments and the impact of other financing on elective pay.