Get Treasury Decision 8859 - Compliance Monitoring And Miscellaneous Issues Relating To The Low-income

On July 29, 2004, The Internal Revenue Service (IRS) issued Revenue Ruling 2004-82 which requires all regulatory agreements for Housing Tax Credit properties to include a prohibition against evicting or terminating the tenancy of Low Income Tenants without good cause.

2085 (1986 Act) created the low-income housing credit under section 42 of the Code. Section 42(a) provides that the amount of the low-income housing credit for any taxable year in the credit period is an amount equal to the applicable percentage of the qualified basis of each qualified low-income building.

(B) Applicable fraction. For purposes of subparagraph (A) , the term “applicable fraction” means the smaller of the unit fraction or the floor space fraction. (ii) the denominator of which is the number of residential rental units (whether or not occupied) in such building.

Section 42(a) provides for a credit for investment in certain low-income housing buildings. The amount of the low-income housing credit for any taxable year in the credit period is an amount equal to the applicable percentage of the qualified basis of each qualified low-income building (as defined in § 42(c)(2)).

You cannot earn more than the annual low-income limits for your household size. For a household of one, your annual income cannot exceed $40,150 to be considered low-income, while a family size of five cannot earn more than $61,950 a year.

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. Investors receive a reduction in their tax liability in return for providing affordable housing to people with fixed or lower income.

Treasury Regulation Section 1.42-6(c)(2) provides instructions to Housing Credit Agencies regarding verifying that costs of more than 10 percent of the reasonably expected basis in the project have been incurred.

Section 42(g)(2)(C) provides that the imputed income limitation applicable to a unit is the income limitation which would apply under § 42(g)(1) to individuals occupying the unit if the number of individuals occupying the unit were: (i) in the case of a unit which does not have a separate bedroom, 1 individual; and (ii ...