Novogradac & Company Llp

Learn about the 2022 qualified census tract (QCT) and difficult development area (DDA) designations and what they mean for low-income housing tax credit developers and properties. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, Novogradac partner Jim Kroger, CPA, and Novogradac manager Sun-Ae Woo, CPA, discuss observations about the 2022 designations and how the COVID-19 pandemic may have affected those designations. They also discuss action items for developers depending on how the 2022 designation will affect their properties.

Operating expenses for low-income housing tax credit-financed properties faced significant changes due to the COVID-19 pandemic of 2020 and the Novogradac Multifamily Rental Housing Operating Expense Report examines those trends. Michael Novogradac, CPA, discusses the report and its implications with Blair Kincer, MAI, CRE (LEED). They discuss the overall trends in operating expenses for 2020, look at what expense categories were most affected by the pandemic and the look at how listeners can use the report for evaluating portfolios or individual properties.

Opportunity zones (OZ) rules are straightforward and manageable for those who understand them and who work with them regularly, but those who are inexperienced in OZs may be unaware of potential pitfalls from which it can be difficult or nearly impossible to recover. Michael Novogradac, CPA, and Novogradac's managing partner, discusses with Novogradac partner John Sciarretti, CPA, how newcomers can navigate basic OZ issues. They start with an overview of OZ financing, then discuss how to start a qualified opportunity fund and how to avoid compliance pitfalls.

The framework of President Joe Biden's Build Back Better plan, released last week, would provide about $550 billion for green energy investment. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Tony Grappone, CPA, discuss the implications of that potential legislation for renewable energy developers. They discuss what questions developers are asking about the current framework and what they should be doing now, supply-chain issues that have arisen since the COVID-19 pandemic and possibilities in repowering existing renewable energy properties. They also discuss the role of storage and how developers should view that option.

If enacted as proposed, the Neighborhood Homes Tax Credit would make about $2 billion in annual tax credit authority available nationwide. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac housing policy consultant Mark Shelburne discuss considerations for state allocating agencies as they prepare for potential enactment of the Neighborhood Homes Tax Credit. They discuss Neighborhood Homes Tax Credit basics, how the incentive compares and contrasts with the low-income housing tax credit, issues for allocating agencies to consider about administration and next steps for allocating agencies, developers and investors.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and George Barlow, CPA, discuss how developers who use federal historic tax credit (HTC) equity in their transactions should address potential legislative changes in the HTC. They look at how this is similar to the period of uncertainty about IRC Section 50(d) income, how effective dates come into play and what to specifically address in negotiations for current or future transactions.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Thomas Stagg, CPA, discuss how a major U.S. Census Bureau announcement will affect income and rent limits for many affordable housing properties in 2023. They discuss how these changes will affect low-income housing tax credit properties and what property owners should do about these changes.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Jeff Nishita, CPA, discuss how developers and investors who are new to the low-income housing tax credit (LIHTC) can use the incentive finance affordable housing for low-income families and individuals. They discuss 4% and 9% LIHTCs, how LIHTC developers are compensated for their work and for the risks they assume, general tips for first-time LIHTC developers and action items for LIHTC developers to get started.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partners Amanda Read, CPA, and Brent Parker, CPA, discuss the 2021 Capital Magnet Fund (CMF) award round, which opened recently and has several approaching deadlines. They discuss the $380 million CMF round, including how it differs from previous rounds. They then talk about who is eligible to participate in the Capital Magnet Fund, next steps for interested applicants and how to make an application more competitive.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Nicolo Pinoli, CPA, discuss key issues that developers and investors of low-income housing tax credit (LIHTC) properties face at Year 15, a critical juncture the marks the end of the 15-year compliance period LIHTC-financed properties. They discuss Year 15 options, considerations and potential hurdles.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Tom Boccia, CPA, discuss the historic tax credit equity market, including tax credit equity pricing, the types of transactions that are popular and more. They also highlight a few of the steps that developers can take to enhance the financial feasibility of their property. As part of that segment, they discuss the transition rule for a one-year credit and the HTC-GO Act.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partners Brad Elphick, CPA, and Rebecca Darling, CPA, discuss highlights from the calendar-year 2020 new markets tax credit (NMTC) allocation round. They also discuss what 2020 NMTC allocation awardees and those who did not receive an award should be doing to prepare for the 2021 allocation round. They share tips for businesses and nonprofits for accessing NMTC financing and close with an analysis of the implications of the 2020 awards round for the 2021 NMTC application round.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Nat Eng, CPA, discuss opportunities for individual investors in solar developments. They discuss reasons for an increased interest in individual solar investment, limitations for individual investors in solar, as well as case studies of individual solar investor types. They close with suggested next steps for individuals who want to learn more about investing in solar.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, Novogradac partner Jim Kroger, CPA, and Novogradac principal Melissa Chung, CPA, discuss the 50% test for affordable rental housing properties financed by private activity bond (PABs) and 4% low-income housing tax credits (LIHTCs). They discuss how the 50% test works, potential complications, what developers can do to avoid failing the test, when to check in and options if failure occurs. They also discuss federal efforts to reduce the 50% test and the implications of that change.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac compliance experts Thomas Stagg, CPA, and Stephanie Naquin discuss how LIHTC property owners and managers can prepare for Oct. 1, when temporary compliance relief expires. They outline how to plan for four areas of expiring compliance relief: annual income recertifications, physical inspections and tenant file reviews, reopening of shared spaces and common areas; and the correction relief period.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner John Sciarretti, CPA, discuss highlights from the Novogradac Opportunity Zones Investment Report: Data Through June 30, 2021. In addition to top-level fundraising amounts, they discuss the types of businesses that are receiving opportunity zones (OZ) investment, geographic placement of OZ investments, average fundraising levels of qualified opportunity funds (QOFs) and upcoming OZ deadlines that could affect QOF fundraising. They also discuss corrections and correcting amendments to final OZ regulations.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, Novogradac partner Nicolo Pinoli, CPA, and Bob Ibanez, a Novogradac senior public policy manager discuss the upcoming calendar-year 2021 new markets tax credit (NMTC) application round, including the timing of the 2020 awards and the opening of the next round. They also discuss community development entity (CDE) eligibility issues, the importance of lining up leverage debt sources early, common issues with the investment pipeline and best practices for communicating a track record, including the role of disadvantaged businesses and communities.

In the 700th weekly Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Dirk Wallace, CPA, discuss the proposed middle-income housing tax credit (MIHTC), including the incentive's purpose, how it compares to the low-income tax credit in size and mechanics, where it would work best and what developers should be considering now to be prepared if the proposal becomes law. They also discuss what stakeholders are saying about the MIHTC, who the likely investors would be and how listeners can participate in helping shape the MIHTC, both in terms of statutory and regulatory moves.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Dirk Wallace, CPA, discuss the proposed neighborhood homes tax credit (NHTC), including what needs the incentive would meet, where it would likely be used and how it would be allocated. They also discuss recapture regulations, how states might adjust regulations to meet their needs and who would be the likely participants in the incentive. They conclude with a discussion of how renovations of homes could be covered by the credit, including financial sources to cover gaps, and what the Neighborhood Homes Tax Credit Working Group will address.

In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac principal Erin Neff, CPA, discuss two common questions asked by Novogradac clients who are thinking about applying for new markets tax credit allocation (NMTC) authority: 1. Are there particular types of borrowers that are underserved by community development entities? 2. How can a NMTC applicant can improve the chances of getting a larger tax credit award? Michael and Erin discuss the answer that connects these two questions, namely using a portion of one's allocation to make small-dollar loans, which are principally done through loan pools. Learn about various tax and compliance considerations related to loan pools, as well as best practices.