Date post: | 27-Mar-2015 |
Category: |
Documents |
Upload: | katelyn-frazier |
View: | 221 times |
Download: | 1 times |
PISD & Qualification Issues
Michael Kotin
Kay-Kay Realty Corp.2008
Placed-in-Service Dates
Placed-in-Service Dates
Two Types of Developments:
Placed-in-Service Dates
Two Types of Developments:
New Construction
Placed-in-Service Dates
Two Types of Developments:
New Construction Acquisition / Rehab
Placed-in-Service Dates
New Construction
Placed-in-Service Dates
New Construction By December 31st of year which is 2 years from allocation year.
Placed-in-Service Dates
New Construction By December 31st of year which is 2 years from allocation year.
Example: if allocation received in 2008, PISD must occur before December 31, 2010.
Placed-in-Service Dates
New Construction By December 31st of year which is 2 years from allocation year.
Defined statutorily by first certificate of occupancy in each building.
Placed-in-Service Dates
New Construction By December 31st of year which is 2 years from allocation year.
Defined statutorily by first certificate of occupancy in each building. May vary from building to
building.
Placed-in-Service Dates
New Construction By December 31st of year which is 2 years from allocation year.
Defined statutorily by first certificate of occupancy in each building.
Occupancy cannot predate PISD.
Placed-in-Service Dates
Acquisition / Rehab
Placed-in-Service Dates
Acquisition / Rehab Date chosen by Owner.
Placed-in-Service Dates
Acquisition / Rehab Date chosen by Owner. PISD election need not
be made until filing due date of tax return for year units are placed in service.
Placed-in-Service Dates
Acquisition / Rehab Date chosen by Owner. Not dictated by
Certificate of Occupancy.
Placed-in-Service Dates
Acquisition / Rehab Date chosen by Owner. Not dictated by
Certificate of Occupancy
Rehab need not be completed.
Placed-in-Service Dates
Acquisition / Rehab Date chosen by Owner. Not dictated by
Certificate of Occupancy
Rehab need not be completed. At least one unit in each
building must be suitable for occupancy.
Placed-in-Service Dates
Acquisition / Rehab Date chosen by Owner. Not dictated by
Certificate of Occupancy.
Rehab need not be completed
Tenancies may predate PISD.
Acquisition / Rehab
Acquisition / Rehab
Choice of PISD impacts:
Acquisition / Rehab
Choice of PISD impacts:
Aggregation period for expenses.
Acquisition / Rehab
Choice of PISD impacts:
Aggregation period for expenses. Capitalization period for construction interest.
Acquisition / Rehab
Choice of PISD impacts:
Aggregation period for expenses. Capitalization period for construction interest. Applicable credit percentage.
Acquisition / Rehab
Choice of PISD impacts:
Aggregation period for expenses. Capitalization period for construction interest. Applicable credit percentage. Start period for credits.
Acquisition / Rehab
Aggregation period for expenses:
Acquisition / Rehab
Aggregation period for expenses:
Generally, rehab costs may be aggregated for 24 month period prior to PISD.
Acquisition / Rehab
Aggregation period for expenses:
Generally, rehab costs may be aggregated for 24 month period prior to PISD.
PLUS
Acquisition / Rehab
Aggregation period for expenses:
Generally, rehab costs may be aggregated for 24 month period prior to PISD.
PLUS
Costs incurred through the end of the owner’s taxable year.
Acquisition / Rehab
Aggregation period for construction interest:
Acquisition / Rehab
Aggregation period for construction interest:
Generally, may capitalize interest until property is placed in service.
Acquisition / Rehab
Aggregation period for construction interest:
Generally, may capitalize interest until property is placed in service.
For “automatic” credits associated with tax exempt bonds, no limitation to eligible basis / available credits.
Acquisition / Rehab
Aggregation period for construction interest:
Generally, may capitalize interest until property is placed in service.
For “automatic” credits associated with tax exempt bonds, no limitation to eligible basis / available credits.
Best to delay PISD as long as possible in order to increase total eligible basis.
Acquisition / Rehab
Aggregation period for construction interest:
Generally, may capitalize interest until property is placed in service.
For “automatic” credits associated with tax exempt bonds, no limitation to eligible basis / available credits.
Best to delay PISD as long as possible in order to increase total eligible basis.
Careful to meet 50% test.
Acquisition / Rehab
Aggregation period for construction interest:
Gut Rehab v Facelift
Generally, may capitalize interest until property is placed in service.
For “automatic” credits associated with tax exempt bonds, no limitation to eligible basis / available credits.
Best to delay PISD as long as possible in order to increase total eligible basis.
Careful to meet 50% test.
Acquisition / Rehab
Applicable credit percentage:
Acquisition / Rehab
Applicable credit percentage:
PISD may be chosen by taxpayer after end of year.
Acquisition / Rehab
Applicable credit percentage:
PISD may be chosen by taxpayer after end of year.
Chosen after all monthly credit percentages for year have been published.
Acquisition / Rehab
Applicable credit percentage:
PISD may be chosen by taxpayer after end of year.
Chosen after all monthly credit percentages for year have been published.
May choose the month with the highest published credit percentage.
Acquisition / Rehab
Start period for credits:
Acquisition / Rehab
Start period for credits: “Look back” applies no matter when in year units are placed in service.
Acquisition / Rehab
Start period for credits: “Look back” applies no matter when in year units are placed in service.
“Look back” goes back to LATTER of:
Acquisition / Rehab
Start period for credits: “Look back” applies no matter when in year units are placed in service.
“Look back” goes back to LATTER of:
1st day of taxpayer’s taxable year, or
Acquisition / Rehab
Start period for credits: “Look back” applies no matter when in year units are placed in service.
“Look back” goes back to LATTER of:
1st day of taxpayer’s taxable year, or
Acquisition date.
Example
Example
Assumptions:
Example
Assumptions: One building project (for
convenience).
Example
Assumptions: One building project (for
convenience). Calendar year taxpayer.
Example
Assumptions: One building project (for
convenience). Calendar year taxpayer. Property acquired July
15, 2008.
Example
Assumptions:
Placed in service October, 2008:
Example
Assumptions:
Placed in service October, 2006:
Aggregation of costs through December 31, 2008.
Capitalization of construction interest through October, 2008 at the latest (generally).
Credit percentage for month of October, 2008 used.
Credits may commence as early as August, 2008.
Example
Assumptions:
Placed in service October, 2009:
Aggregation of costs through December 31, 2009.
Capitalization of construction interest through October, 2009 at the latest (generally)
Credit percentage for month of October, 2009 used.
Credits may commence as early as January, 2009.
Example
Assumptions:
Placed in service October, 2010:
Aggregation of costs through December 31, 2010 except that costs incurred from July, 2008 through October, 2008 may not be included.
Capitalization of construction interest through October, 2010 at the latest (generally).
Credit percentage for month of October, 2010 used.
Credits may commence as early as January, 2010.
Tenant Qualification
Tenant Qualification
Qualification may predate PISD.
Tenant Qualification
Qualification may predate PISD.
Qualification may predate “look back”.
Tenant Qualification
Qualification may predate PISD.
Qualification may predate “look back”.
Qualification may NOT predate acquisition date.
Tenant Qualification
Qualification may predate PISD.
Qualification may predate “look back”.
Qualification may NOT predate acquisition date.
Recertification at PISD or “look back” date is NOT required.
Rev. Proc. 2003-82
Is a safe harbor provision.
Assumes tenant occupancy in advance of PISD or “Look back” date.
Is NOT a requirement.
Rev. Proc. 2003-82
Is designed to insure compliance with Next Available Unit Rule.
Relevant on mixed-income properties with buildings which have applicable fractions under 100%.
NOT applicable on 100% tax credit properties where ALL units are always rented to qualified households.
NOT relevant on buildings in mixed-income properties which have 100% applicable fractions.
Rev. Proc. 2003-82
Safe harbor provided if management “tests” eligibility of existing residents.
Test may be retroactive as long as retroactive compliance with NAU can be demonstrated.
Does NOT require that existing residents have incomes below either move-in or recertification limits.
Does NOT require that “test” be a fully documented recertification. Standard may be substantially less.
Placed-in-Service Dates
Other Considerations:
Placed-in-Service Dates
Two Types of Developments:
Investor in ownership
Placed-in-Service Dates
Two Types of Developments:
Investor in ownership
Syndicator secondary sale completed