Tax Credit Questions and Answers
Verified 100% Correct
Interest Payable on Perm Loans costs are _____ in eligible basis - ANSWER interest
payable on perm loan costs are excluded fromeligible basis
Insurance costs are _____ in eligible basis - ANSWER Insurance costs are excluded from
eligible basis
JRS Form 8609s must be issued for each ____ in a _____ - ANSWER 8609s must be
issued for each building in a multiple building project
Offsite costs, such as streets and infrastructure that are built and dedicated to
a municipality, are ______ in basis - ANSWER (now) included in basis
Property Tax costs incurred following construction completion are _____ in eligible basis
- ANSWER Property Tax costs are excluded from eligible basis
This is sometimes referred to as a "true debt" test or "all events test" - ANSWER When the
party performing the cost certification for the owner submitting the cost cert determines
whether or not "soft" debt financing is a valid expense (meets IRS definition)
The cost certification narrative MUST contain a representation by the party performing the
cost certification that these forms of financing are _____ ____ - ANSWER not grants
the cost of facilities that charge fees not included in the rent, such as the cost of
constructing garages that charge a monthly fee, are _______ eligible basis - ANSWER the
cost of facilities that charge fees not included in the rent, such as the cost of
constructing garages that charge a monthly fee, are excluded from eligible basis
, A cost certification can be rejected for the following reasons: - ANSWER -preparing
agency has, or through its actions, lead the HFA to believe it has little or no
experience with LIHTC, RE ACcounting, or Tax Law
HFA stands for - ANSWER Housing Finance Agency
A property with all of its units used for affordable housing will have an applicable
fraction of - ANSWER 100%; its qualified basis is equal to its eligible basis
There are three credit rates used in calculating the LIHTC: - ANSWER (1) 9%
(2) 4%
(3) 4% (tax-exempt bond financing)
AFR stands for - ANSWER Applicable Federal Rate
The 9% annual credit is applied to _____ and ____ - ANSWER eligible construction and
"substantial" rehabilitation costs
The 4% annual credit is applied to _____- - ANSWER the acquisition cost of existing
buildings to be rehabilitated
If a project uses tax-exempt bond financing, a 4% annual credit is used for - ANSWER all of
its eligible costs, including eligible construction and substantial rehabilitation costs
If a LIHTC property that consists solely of new construction and that does not use
bond financing will qualify for the - ANSWER 9% annual credit
Verified 100% Correct
Interest Payable on Perm Loans costs are _____ in eligible basis - ANSWER interest
payable on perm loan costs are excluded fromeligible basis
Insurance costs are _____ in eligible basis - ANSWER Insurance costs are excluded from
eligible basis
JRS Form 8609s must be issued for each ____ in a _____ - ANSWER 8609s must be
issued for each building in a multiple building project
Offsite costs, such as streets and infrastructure that are built and dedicated to
a municipality, are ______ in basis - ANSWER (now) included in basis
Property Tax costs incurred following construction completion are _____ in eligible basis
- ANSWER Property Tax costs are excluded from eligible basis
This is sometimes referred to as a "true debt" test or "all events test" - ANSWER When the
party performing the cost certification for the owner submitting the cost cert determines
whether or not "soft" debt financing is a valid expense (meets IRS definition)
The cost certification narrative MUST contain a representation by the party performing the
cost certification that these forms of financing are _____ ____ - ANSWER not grants
the cost of facilities that charge fees not included in the rent, such as the cost of
constructing garages that charge a monthly fee, are _______ eligible basis - ANSWER the
cost of facilities that charge fees not included in the rent, such as the cost of
constructing garages that charge a monthly fee, are excluded from eligible basis
, A cost certification can be rejected for the following reasons: - ANSWER -preparing
agency has, or through its actions, lead the HFA to believe it has little or no
experience with LIHTC, RE ACcounting, or Tax Law
HFA stands for - ANSWER Housing Finance Agency
A property with all of its units used for affordable housing will have an applicable
fraction of - ANSWER 100%; its qualified basis is equal to its eligible basis
There are three credit rates used in calculating the LIHTC: - ANSWER (1) 9%
(2) 4%
(3) 4% (tax-exempt bond financing)
AFR stands for - ANSWER Applicable Federal Rate
The 9% annual credit is applied to _____ and ____ - ANSWER eligible construction and
"substantial" rehabilitation costs
The 4% annual credit is applied to _____- - ANSWER the acquisition cost of existing
buildings to be rehabilitated
If a project uses tax-exempt bond financing, a 4% annual credit is used for - ANSWER all of
its eligible costs, including eligible construction and substantial rehabilitation costs
If a LIHTC property that consists solely of new construction and that does not use
bond financing will qualify for the - ANSWER 9% annual credit
