Forget it. I read the material put out by the government about the program many years ago. You can only deal with that program if you have an attorney and an accountant who are dedicated to it. The paperwork is horrendous. There are exceptions to the exceptons to the expections. And I’m not kidding. I had an extremely hard time trying to understand what they were saying. And I’m a college graduate. I’d guess there are probably attorneys that could not understand it.
FOr three properties? Nope. Not worth it at all.
Besides, while it took a while after it started for people to learn about it, the bigger operators discovered it and get all the government allowcations under the program. There are limited amounts available in each state every year. The states are oversubscribed with organizations that want to get in on this great deal. You chances are less than nil, in my opinion.
If you check around in your state government, however, you will find the office handling the allocations and you can get the bad news directly from them. Hmmm. Probably a google search on the state name and “low income tax credit” might get you there in a hurry.
Posted by Wayne McDaniel on September 05, 2003 at 23:57:03:
I have 3 rental houses currently on the local section 8 program and I was wondering if I am eligible for the low income tax credit. I don’t really know how to apply, if I am eligible or what the impact of this would be. If anyone could help educate me about this, I would greatly appreciate it. Thanks for your time.
Posted by Nate(DC) on September 06, 2003 at 22:50:10:
I deal with this program frequently, and I will echo what Ron said. For 3 units, it is not worth the paperwork and hassle. You can get the credit for 3 eligible activities - development (new units), rehab, and acquisition. Since these are existing units you can’t get development, and since you already own them you can’t get acquisition. At best, if you slogged through all the paperwork and got the credits (of which there is no guarantee, because they are competitively allocated), you could get an annual credit equal to about 8% of your rehab expenses. So if you spent $10,000 per unit on rehab you would get about a $2,400 per year credit. And that’s if the credit did not get wiped out by the AMT or some other exclusion.
Trust me, it is not worth your time for these units!