Why you need to know LIHTC!
Below is a clip of what a LIHTC is and how it can benefit you as an investor. The article is a forward and, in my opinion, has a decent amount of relevant information. For more information feel free to click on a link! If you need assistance with LIHTC contact 1 Up Lending.
The Low-Income Housing Tax Credit (LIHTC - often pronounced "lie-tech", Housing Credit) is a dollar-for-dollar tax creditin the United States for affordable housing investments. It was created under the Tax Reform Act of 1986 (TRA86) and gives incentives for the utilization of private equity in the development of affordable housing aimed at low-income Americans. LIHTC accounts for the majority (approximately 90%) of all affordable rental housing created in the United States today.[1] As the maximum rent that can be charged is based upon the Area Median Income ("AMI"), LIHTC housing remains unaffordable to many low-income (<30% AMI) renters. The credits are also commonly called Section 42 credits in reference to the applicable section of the Internal Revenue Code. The tax credits are more attractive than tax deductions as the creditsprovide a dollar-for-dollar reduction in a taxpayer's federal income tax, whereas a tax deduction only provides a reduction in taxable income. The "passive loss rules" and similar tax changes made by TRA86 greatly reduced the value of tax credits and deductions to individual taxpayers. Less than 10% of current credit expenditures are claimed by individual investors.[2]
In 2010, the President's Economic Recovery Advisory Board (PERAB) estimated that the LIHTC program would cost the federal government $61 billion (an average of about $6 billion per year) in lost tax revenue from participating corporations from 2008-2017, as well as noting that experts believe that vouchers would more cost-effectively help low income households.[3]
To learn more, please contact 1 Up Lending. Jeffrey Baase has been in Finance and Real Estate for over 22 years. Jeff has a degree in accounting and economics. Jeff has worked in Public Accounting, Finance, and Real Estate, For both local and global powerhouses like Merrill Lynch, to name one.