Unwinding Historic Tax Credit Deals: What’s Important
By Caitlin Jones
1 min read
Tax Credit Advisor, January 2011: Developers and investors need to be careful as they prepare to unwind their existing federal historic tax credit transactions, particularly if the deal also has other types of federal tax credits, speakers said at a recent Washington, D.C. conference held by the Institute for Professional and Executive Development.
Washington attorney Andrew Potts, a partner in the law firm Nixon Peabody LLP, indicated that unwinds have changed over the years with changes in the syndication of federal historic tax credits. Until the mid- to late-1990s, high net-worth individuals were the predominant investors in historic tax credit transactions and the single-entity deal structure was the norm. Since then, though, corporate investors are the predominant investors and the credit pass-through structure — also called master lease structure — is now typical. In these, a landlord entity is created that makes an election to pass through the historic tax credits to a master tenant entity.
