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Tax Relief on Certain Low-Income Housing Projects

We hope this message finds you well during these uncertain times. Just like it did when it postponed the due date for personal income taxes from April 15 to July 15 because of the pandemic, the IRS is providing extra time for owners and operators of qualified low-income housing projects to meet and perform requirements. Deadlines required under Section 42 of the Internal Revenue Code are being pushed back. It is equally important to note that at this point, just as with personal income tax returns, the due dates for these low-income housing requirements revert to their usual time frames in 2021.
Relief from certain requirements under Section 42 of the Internal Revenue Code for qualified low-income housing projects and qualified residential rental projects
The following is applicable for the period beginning April 1, 2020, and ending December 31, 2020 (Note: Original requirements will resume after December 31, 2020):
  • An owner of a low-income building is not required to perform income re-certifications;
  • An Agency is not required to conduct compliance-monitoring inspections or reviews;
  • Reduction of eligible basis for temporary closure of a common area in a low-income building is not required;
  • Medical personnel and other essential workers (as defined by State or local governments) may be treated as Displaced Individuals for purposes of providing emergency housing.
Deadlines extended to December 31, 2020, for all original deadlines starting April 1, 2020, through December 31, 2020, for the following:
  • 10% test for carryover allocations;
  • 24-month minimum rehabilitation expenditure period;
  • Reasonable period for restoration or replacement in the event of casualty loss;
  • Reasonable restoration period in the event of prior major disaster;
  • 12-month transition period to meet set-asides for qualified rental projects;
  • 2-year rehabilitation expenditure period for bonds used to provide qualified residential rental projects.
These announcements came in IRS Notice 2020-53 .
To discuss the implications this might have on your property, please contact your Whittlesey Advisor .

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