IRS rings in 2014 with more clarity on tax credit structure

A somewhat quiet, but nonetheless controversial, tax credit ruling erupted in August of 2012, when a court decision found that a development partner in a historic rehab was not, in fact, a bona fide development partner. What did this mean? Quite simply, this ruling had the potential to take redevelopment partners, often the development partners who put upfront construction money into a project, off rehab projects. And removing the funding source to make construction happen means stopping rehab projects in their tracks (this article from the Canton Repository shows how the Boardwalk decision hit home in Ohio.)
Without clear guidelines on how the IRS would treat development partners, active investment has lagged in the past 16 months. Fortunately, the IRS recently published guidelines to clarify development partners’ relationships, and how those partners can make use of tax credit allocations. The Preservation Exchange, a blog originating from Preservation Studios in Buffalo, NY, published a post providing analysis of what the IRS guidelines may mean for future developer partnership structures. You can read the PE post here.
You can read the IRS guidelines here. Heritage Ohio will continue to monitor the impact of the IRS guidelines and share updates as we learn of them.