Commercial Activities at Housing Credit Properties Can Have Negative Consequences
By Caitlin Jones
1 min read
By A. J. Johnson
Tax Credit Advisor, November 2010: Owners and developers need to be careful when it comes to the presence of commercial activities in low-income housing tax credit (LIHTC) projects.
While commercial activities – activities intended to make a profit – are permitted in an LIHTC project, the costs of a project must be reasonably allocated between the commercial and residential uses in a development that has both. The eligible basis of a low-income building, which determines the housing credit amount, excludes the costs of any property that is not residential rental property.
