Irs Section 42

Section 42 of the internal revenue service s tax code also known as the low income housing tax credit exists to serve high need populations in distressed housing areas both for residential.

Irs section 42. These tax benefits plus the possibility of cash proceeds from the. Credit under 42 of the internal revenue code. The irc 42 program provides tax incentives for investors to make equity investments.

The section 42 housing program refers to that section of the internal revenue tax code which provides tax credits to investors who build affordable housing. Links to related code sections make it easy to navigate within the irc. The amount of the low income housing credit for any taxable year in the.

Buildings financed with tax exempt bonds under section 42 h 4 b plr 200232002 august 9 2002 carryforward election of unused private activity bond volume cap. The purpose of the program is to provide a tax credit to property owners developers to create affordable rental housing. The section 42 low income housing tax credit program also called the rental housing tax credit program is a federal program governed by the internal revenue service irs.

Internal revenue code 42 low income housing credit. Investors receive a reduction in their tax liability in return for providing affordable housing to people with fixed or lower income. For purposes of section 38 the amount of the low income housing credit determined under this section for any taxable year in the credit period shall be an amount equal to 1 the applicable percentage of 2 the qualified basis of each qualified low income building.

Federal rental assistance programs help about 5 million households with low comes to affordably rent modest housing. Bloomberg tax offers full text of the current internal revenue code free of charge. Free access to full text of the internal revenue code including editor s notes and updated continuously from bloomberg tax.

In exchange for equity investors receive tax credits and other tax benefits associated with ownership of the project to offset federal income taxes for a ten year period. Eligible basis and qualified basis issues law section 42 a provides for a credit for investment in certain low income housing buildings. Plr 200232018 august 9 2002 transfer of bare legal title and recapture under section 42 j plr 200224029 june 14 2002 ten year holding period under 42 d 2 b ii plr 200232019 may 3 2002.