Low Income Housing Tax Credit for 2011, 2012

The Low Income Housing Tax Credit (LIHTC) is a tax credit that was made by the Tax Reform Act of 1986. The tax credit benefits developers with lots deductions if they create housing that low-income people can afford.

The developer can claim a tax credit which is far better than a tax deduction.

Credits Determined by Costs

The owner of the development uses the tax credits and all of that is calculated and depends on the costs of the building project. Sometimes the builder or developer sells the tax credits to a group of investors and the syndicator is their representative.

Sometimes a company buys the tax credits but, usually it’s a private group of investors. The best part for them is the fact that they can subtract the tax credit directly from their taxable income.

Tax Credits are used for:

• Brand New Construction
• Fixing up an Existing Development
• Taking Over and Fixing up an Existing Development

Projects Must Meet Requirements

There are specific rules about how many rental units are rent restricted and have to be rented by individuals who qualify in the low-income bracket. Once the development for low-income housing gets started they have to stay with the development for a number of years to maintain eligibility for the tax credits.

Helping Those Who Need Help

Of course it’s always better to exceed the minimum when it comes to helping families with low-income. It is better for the developers to exceed these minimums of years for eligibility because of the way states award credits. States will have a more positive approach for developers who are serving a higher percentage of low-income families who are eligible for lower income housing.

Claim the Credit

If you are a developer and would like to claim the low-income housing tax credit then, I would use the software from TurboTax Online.

The “Business” option is the best choice for you. This plan imports data from QuickBooks, has an Audit Alert System, creates W-2 and 1099-MISC Forms, Maximizes Business Deductions and provides support along the way. These are only some of the advantages to using Turbo Tax Online! Visit their website today to see what you have been missing.