Novogradac & Company Llp

Michael Novogradac, CPA, and Novogradac partner Lance Smith, CPA, discuss the opportunities, risks, and challenges faced by for-profit housing developers when partnering with not-for-profit affordable housing developers. Learn about the benefits, such as improved chances of being awarded low-income housing tax credits, lower property taxes and access to soft financing. They also discuss the risks including tax-exempt use property and the material participation standard. Dive deep into the intricacies of joint ventures and gain insights from the recently released Novogradac Nonprofit Housing Developers Handbook.'

The past, present and future are all relevant in new markets tax credits (NMTCs) in the spring of 2025, with multiple issues that touch on each of the three time periods among some of the hottest topics in the tax credit community. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, is joined by guests Rebecca Darling, CPA, and Brad Elphick, CPA, to discuss five key issues of interest in the community. First, the trio discusses a March 14 executive order by President Donald Trump that stoked concerns as to the future status of the Community Development Financial Institutions Fund (CDFI) Fund, which administers the NMTC. Next, Darling, Elphick and Novogradac discuss the looming expiration date for the NMTC and the status of advocacy efforts to make the NMTC permanent. Third, Darling and Elphick share their thoughts on the ongoing 2024-2025 "double round," a $10 billion allocation round. The fourth topic covers qualified equity investment and qualified low-income community in

The U.S. Department of Housing and Urban Development (HUD) released the annual rent and income limits April 1 for property managers to apply when renting properties financed by low-income housing tax credit (LIHTC) equity as well as HUD programs such as Section 8, Section 202 and Section 811. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Thomas Stagg, CPA, one of Novogradac and the nation's leading experts in rent and income limits, discuss three key takeaways from this year's release. First, Stagg and Novogradac discuss income limits being higher than anticipated. The second key takeaway is why the rent and income limits were higher'a change in HUD's methodology for calculating inflation factor in rent and income limits. Finally, they discuss a number of metropolitan statistical areas (MSAs) that were reorganized or changed in the 2025 limits release, including why a disproportionate number of the changes are in Connecticut.

This Tax Day episode of Tax Credit Tuesday features guest host Tony Grappone, CPA, and guest Reza Karim, CPA. They discuss state and local tax issues vital to renewable energy facilities, including various types of taxes such as property, sales and use taxes. They also delve into tax credit transfers, nexus, apportionment and non-resident withholding, providing practical tips and insights for managing these complex tax landscapes. They highlight the importance of early planning and engagement with local jurisdictions to optimize tax outcomes.

Novogradac's e-learning platform'NovocoTraining'provides webinars and on-demand training for myriad community development tax incentives, with teaching for audiences from beginner to expert. In this week's Tax Credit Tuesday episode, Michael Novogradac, CPA, and Wayne Michael, Novogradac's senior director of external education and e-learning, discuss the options available. They discuss how it works, as well as how Michael uses visuals to teach important concepts. They also talk about who makes up the presenters and the typical audience, special certifications and some new options, including a significant change in how to become an "all-you-can-eat" member.

After 10 weeks of the second Trump administration, funding and staffing changes continue to develop for affordable housing funded by the U.S. Department of Housing and Urban Development (HUD) and for the public housing authorities (PHAs) that oversee much of that spending. On this week's episode of Tax Credit Tuesday, host Michael Novogradac, CPA, discusses HUD-related issues with Peter Lawrence, Novogradac's chief public policy officer, and Rich Larsen, CPA, who leads the company's public housing authority practice. They look at how the federal government's continuing resolution funding package for fiscal year 2025 affected HUD spending, then look at issues in the fiscal year 2026 funding plans. After that, they discuss how the reduction in the HUD workforce and field offices affect PHAs and others, before wrapping up with a look at how cuts to the Green and Resilient Retrofit Program funding are playing out and what we know now that we didn't know on inauguration day.

Compliance requirements come in a variety of shapes and sizes for affordable rental housing property managers using incentives such as the low-income housing tax credit (LIHTC), HOME Investment Partnerships Program, tax-exempt bonds, project-based rental assistance (PBRA) programs, public housing and property tax exemptions. In this week's episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Stephanie Naquin discuss the three key steps when qualifying tenants to live in affordable housing properties: Screen, verify and certify. Later, Naquin and Novogradac discuss the emerging issues around property tax exemption compliance.

In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Novogradac partner Tony Grappone, CPA, delve into essential strategies for reviewing tax returns for renewable energy partnerships during tax season. They discuss pivotal areas such as comparing tax return drafts to key documents, federal and state tax differences, and proper allocation of losses and income. They highlight key services such as financial projections, cost segregation and appraisals. The episode also covers the importance of investor review, state-return specific issues and ensuring compliance with new tax credit requirements under the Inflation Reduction Act.

Twinning or sidecar financing that pairs the federal historic rehabilitation tax credit (HTC) with other tax incentives can be a crucial strategy to finance the renovation and redevelopment of some the nation's historic buildings. In the latest episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Michael Kressig, CPA, discuss some of the benefits and hurdles that come with blending federal HTCs with other tax incentives such as the low-income housing tax credit (LIHTC), new markets tax credit (NMTC), opportunity zone (OZ) incentive, renewable energy tax credits (RETC) and state HTCs. Novogradac and Kressig discuss how often each of the various incentives is used in combination with the federal HTC as well as how often Kressig sees transactions with three or more of the subsidies.

Localities'whether cities, townships or counties'are crucial "partners" in low-income housing tax credit (LIHTC) transactions. While not an actual member of the partnership, localities play a major role in the ability to fund affordable housing properties. In this week's episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Mark Shelburne, a housing policy consultant at Novogradac, discuss the roles localities play in LIHTC-financed housing, both for them and for the developers who work with them. They begin by discussing the various ways localities are involved in those transactions, then discuss how they play a role in funding the property, including what to avoid. After that, Novogradac and Shelburne examine nonfinancial ways that localities can help and the role of localities in helping properties meet timelines and deadlines.

Two important financing options when building affordable housing are 4% and 9% low-income housing tax credits (LIHTCs). In the latest episode of the Tax Credit Tuesday podcast, host Michael Novogradac, CPA, and guest Charlie Rhuda, CPA, discuss developers that chose to combine the incentives in a single development, sometimes called "sidecar financing" due to the nature of the financing structure. They provide an overview of the difference between the financing tools and discuss why affordable housing professionals would combine them. Later, Rhuda identifies four types of challenges that can arise for those using the sidecar financing model to develop affordable housing.

Michael Novogradac, CPA, and Tony Grappone, CPA, dive deep into the latest trends in renewable energy tax credit (RETC) financing. In this episode of Tax Credit Tuesday, they discuss the most common structures from 2024, including partnership flips, T flips, and inverted leases and their popularity in the market. They also cover the types of projects funded, like solar and battery storage, investor types (direct vs. syndicated) and pricing trends. They share insights from analyzing over 50 deals worth $12 billion in CapEx and $4.6 billion in tax equity investment. Additional topics include technology-neutral tax credits post-Inflation Reduction Act (IRA), metrics for evaluating investments and future market expectations.

Legislation to modernize and renew the opportunity zones (OZ) incentive in 2025 is essential to its long-term prospects. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA, and Jason Watkins, CPA, discuss the path forward for OZs under potential tax law changes. They discuss the political outlook and priorities under a Republican Party that holds the White House, Senate and House. They discuss the push for an extension to the incentive. Later, Novogradac and Watkins discuss modernization and statutory proposals for OZs, including reporting requirements, investment in rural OZs and reinvesting gains in new businesses. Finally, they talk about how the outlook for permanency for the incentive might look.

The 2025 application period for affordable housing properties to receive a 20% "adder" to the 30% investment tax credit (ITC) for solar power opened in January. In this week's Tax Credit Tuesday podcast, Michael Novogradac, CPA, and Novogradac partner Dirk Wallace, CPA, discuss the use of solar-generated electricity at affordable housing properties, including how to evaluate whether solar works at your property, how President Donald Trump's executive orders affect the awarding of bonus credit percentage, how to apply for the "adder" and what properties are eligible. They also discuss the demand for the "adders" and how to demonstrate benefits to tenants.

After chatter about budget cuts during the campaign from several members of President Donald Trump's new administration, stakeholders in the affordable housing community watch attentively as developments arise in Washington, D.C. In this episode of Tax Credit Tuesday, Michael Novogradac, CPA; Rich Larsen, CPA; and Peter Lawrence, Novogradac's director of public policy and government relations, look at what may be in store for affordable housing through the prism of the U.S. Department of Housing and Urban Development (HUD). First, the trio discusses what might be ahead under Scott Turner, Trump's nominee for HUD secretary. Next, Lawrence and Larsen explore what some of the potential upsides for HUD might be under the new administration. Later, Larsen details challenges that may be on the horizon and how public housing authorities can act now to navigate possible shortfalls.

With a major federal tax bill anticipated in 2025 and a newly seated Congress, Michael Novogradac, CPA, and Novogradac Director of Public Policy and Government Relations Peter Lawrence look ahead to four new federal tax incentives that could be introduced in 2025. In addition to discussing each of the four proposed incentives'the preservation tax incentive, Neighborhood Homes Tax Credit, Workforce Housing Tax Credit and Office Conversion Tax Credit'Lawrence provides insight into which members of Congress may sponsor each of the various bills as well as what the legislative path forward for each looks like.

Rental income and operating expenses both set records and increased at rates higher than the consumer price index for housing in 2023, according to data in the 2024 Novogradac Operating Income and Expenses Report. In this week's podcast, Michael Novogradac and report author Kelly Gorman, a partner in Novogradac's Clark, New Jersey, office, discuss the findings of the report and what affordable housing operators should learn from them. They look at the overall increases, then drill down on specifics about property insurance, repairs and maintenance and utility expenses, including what caused increases and whether trends were likely to continue in 2024 and 2025. They also look at the effect of U.S. Department of Housing and Urban Development (HUD) rent and income limits and discuss expense categories that vary depending on geography.

Michael Novogradac, CPA, and Tony Grappone, CPA, continue their discussion on the top 10 tax issues renewable energy developers and investors should address with their tax accountants with this follow-up to the Dec. 17, 2024, episode. In Part 2, they cover the next five critical topics: assessing positive taxable income, ownership flips, revisiting cash waterfalls, tax credit recapture events and ownership changes during the year. This episode provides essential insights for managing the operational and disposition phases of clean energy projects, ensuring compliance and optimizing tax strategies.

Michael Novogradac, CPA, and Tony Grappone, CPA, discuss essential topics for renewable energy developers and investors to address with their tax preparers. They cover the first five of 10 key issues for renewable energy developments: placed-in-service date determination, tax depreciation conventions, comparing financial projections with actual results, whether a deficit restoration obligation is in place, and state and local tax considerations. This episode emphasizes the importance of preparing for a smooth tax season and avoiding costly pitfalls, providing valuable insights for both new and seasoned professionals in the renewable energy sector.

As 2024 nears its conclusion, Michael Novogradac, CPA, interviews Christina Apostolidis, CPA, to discuss year-end financial reassessments for affordable housing professionals. The episode of Novogradac's Tax Credit Tuesday podcast focuses on comparing actual performance to projected tax credit delivery. Novogradac and Apostolidis highlight three key areas to revisit: placed-in-service dates, lease-up status and updating expected eligible basis, all crucial for maximizing tax credits. Apostolidis, who will chair the Novogradac 2025 Affordable Housing Developers Conference in Florida next month, offers insights on managing these components effectively as the year ends. The episode is part of the "So You Want to Be a LIHTC Developer" series aimed at educating those in affordable rental housing finance.