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LIHTC Investor Tax Treatment

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Tax planning is an important factor that investors look at when evaluating projects for potential investments. LIHTCs are designed to reduce an investor's tax liability, so investors must be able to project their taxable income over the term of the investment in order to evaluate to what extent they can use LIHTCs to reduce their…

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What is “Recapture”

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A recapture, or taking back, of LIHTCs occurs when a project violates requirements of the program.  Typical recapture occurs when the project fails to meet the minimum set-aside requirements by the end of each taxable year.  This can occur if the project or building fails to meet the requirements in the first, or subsequent, tax…

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What is a LIHTC? How does it work?

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Overview Under the Tax Reform Act of 1986, Congress enacted the low-income housing tax credit (LIHTC) to encourage private development of affordable housing.  Through this supply side initiative, the federal government offers tax incentives to bring the private sector into the affordable housing business and to alleviate the federal government's burden of developing affordable housing…

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