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Under the new law, the 20 percent tax credit for certified historic structures is retained and modified, requiring the 20 percent HTC to be claimed ratably over the five-year period beginning in the taxable year in which the building is placed in service.
Transitional rule Under the 2017 TCJA transition rule: (1) for certified historic buildings, there is a 20% credit entirely claimed in the placed-in-service year. Or (2) for pre-1936 buildings that are not certified historic structures, there is a 10% credit entirely claimed in the placed-in-service year.
The California historic rehabilitation tax credit (SB 451) was signed into law in October, 2019 to create an important new incentive for economic development through the rehabilitation of historic buildings, many of which can be adaptively reused for much-needed housing.
Monetization Process: Some state HTC programs provide for certificated credits, which essentially allow credits to be bought and sold. Other states require investors to be partners with the project sponsor in a similar manner to the federal HTC.
Transitional rule Under the 2017 TCJA transition rule: (1) for certified historic buildings, there is a 20% credit entirely claimed in the placed-in-service year. Or (2) for pre-1936 buildings that are not certified historic structures, there is a 10% credit entirely claimed in the placed-in-service year.
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Direct Sale - Project Owner sells the certificated tax credits to a third party purchaser. The sale proceeds are considered investment income subject to capital gains taxes under the Internal Revenue Code to the Project Owner.
The federal historic rehabilitation tax credit (HTC) program is an indirect federal subsidy to finance the rehabilitation of historic buildings with a 20 percent tax credit for qualified expenditures.
About the Provisions All projects (placed in service after April 1, 2021) would receive a temporary increase to the credit to 30% through 2025.

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