Instructions for Form 8609 (Rev. July 2018)

1 Instructions for form 8609. Department of the Treasury Internal Revenue Service (Rev. July 2018). Low-Income Housing Credit Allocation and Certification Section references are to the Internal Revenue Code unless project in which the taxpayer's basis is more than 10% of the otherwise noted. project's reasonably expected basis as of the end of that second calendar year; or Future Developments 4. The allocation is made for a project that includes more For the latest information about developments related to than one building if: form 8609 and its Instructions , such as legislation enacted a. The allocation is made during the project period, after they were published, go to b. The allocation applies only to buildings placed in What's New service during or after the calendar year in which the allocation is made, and Average income test. An average income election has c. Each building in the project to which the allocation been added to the section 42(g)(1) minimum set-aside applies is identified by a separate building identification requirements by the Consolidated Appropriations Act of 2018.

2 Number (BIN). ( 115-141). See Line 10c and Line 10d, later, for details. Regarding (3) and (4) (carryover allocations) see sections Reminder 42(h)(1)(E) and 42(h)(1)(F) and Regulations section The 9% minimum applicable percentage of section 42(b)(2) The agency can only make an allocation to a building has been made permanent for certain buildings placed in located within its geographical jurisdiction. Once an service after July 30, 2008. For details, see the Instructions allocation is made, the credit is allowable for all years during for Part I. the 10-year credit period. A separate form 8609 must be completed for each building to which an allocation of credit is General Instructions made. Multiple Forms 8609. Allocations of credit in separate Purpose of form calendar years require separate Forms 8609. Also, when a Owners of residential low-income rental buildings are building receives separate allocations for acquisition of an allowed a low-income housing credit for each qualified existing building and for rehabilitation expenditures, a building over a 10-year credit period.

3 form 8609 can be used separate form 8609 must be completed for each credit to obtain a housing credit allocation from the housing credit allocation. agency. A separate form 8609 must be issued for each Tax-exempt bonds. No housing credit allocation is required building in a multiple building project. form 8609 is also used for any portion of the eligible basis of a qualified low-income to certify certain information. building that is financed with tax-exempt bonds taken into Housing credit agency. This is any state or local agency account for purposes of the volume cap under section 146 if authorized to make low-income housing credit allocations principal payments on the financing are applied within a within its jurisdiction. reasonable period to redeem obligations the proceeds of which were used to provide the financing, or the financing is Building identification number (BIN).

4 This number is refunded as described in section 146(i)(6). An allocation isn't assigned by the housing credit agency. The BIN initially needed when 50% or more of the aggregate basis of the assigned to a building must be used for any allocation of building and the land on which the building is located credit to the building that requires a separate form 8609 (see ( defined below) is financed with tax-exempt bonds Multiple Forms 8609, later). For example, rehabilitation described in the preceding sentence. However, the owner expenditures treated as a separate new building shouldn't must still get a form 8609 from the appropriate housing have a separate BIN if the building already has one. Use the credit agency (with the applicable items completed, including number first assigned to the building. an assigned BIN). Allocation of credit. For an owner to claim a low-income Land on which the building is located.

5 This includes housing credit on a building (except as explained under only land that is functionally related and subordinate to the Tax-exempt bonds, later), the housing credit agency must qualified low-income building. (See Regulations sections make an allocation of the credit by the close of the calendar (a)(3) and (b)(4)(iii) for the meaning of year in which the building is placed in service, unless: functionally related and subordinate. ). 1. The allocation is the result of an advance binding commitment by the housing credit agency made not later Filing Requirement than the close of the calendar year in which the building is Housing credit agency. Complete and sign Part I of form placed in service (see section 42(h)(1)(C)); 8609 and make copies of the form . Submit a copy with form 2. The allocation relates to an increase in qualified basis 8610, Annual Low-Income Housing Credit Agencies Report, (see section 42(h)(1)(D)); and keep a copy for the records.

6 The agency must send the 3. The allocation is made for a building placed in service original, signed form 8609 (including Instructions ) to the no later than the second calendar year following the calendar building owner. year in which the allocation is made if the building is part of a Jul 27, 2018 Cat. No. 52385A. Building owner. You must make a one-time submission of Line 1a. Generally, where form 8609 is the allocating form 8609 to the Low-Income Housing Credit (LIHC) Unit at document, the date of the allocation is the date the form the IRS Philadelphia campus address below. After making a 8609 is completed, signed, and dated by an authorized copy of the completed original form 8609, file the original of official of the housing credit agency during the year the the form with the unit no later than the due date (including building is placed in service and mailed to the owner of the extensions) of your first tax return with which you are filing qualified low-income building.

7 form 8609-A, Annual Statement for Low-Income Housing However, if an allocation is made under section 42(h)(1). Credit. (E) or 42(h)(1)(F), the date of allocation is the date the Where to file form 8609. Send the properly completed authorized official of the housing credit agency completes, and signed form (s) to: signs, and dates the section 42(h)(1)(E) or 42(h)(1)(F). document used to make the allocation. If no allocation is Department of the Treasury required ( , 50% or greater tax-exempt bond financed Internal Revenue Service Center building), leave line 1a blank. Philadelphia, PA 19255-0549. Line 1b. Enter the housing credit dollar amount allocated to Note. The housing credit agency may require you to submit the building for each year of the 10-year credit period. The a copy of form 8609 with a completed Part II to the agency. amount should equal the percentage on line 2 multiplied by You should contact the agency to obtain agency filing the amount on line 3a.

8 The housing credit agency is required requirements. to allocate only the amount necessary to assure project feasibility. To accomplish this, the agency can, to the extent Also, file form 8609-A for each year of the 15-year permitted by the Code and regulations, lower the percentage compliance period. The credit is claimed on form 8586, on line 2 and the amount on line 3a. See the Instructions for Low-Income Housing Credit. See the forms for filing these lines for the limits that apply. For tax-exempt bond Instructions . projects for which no allocation is required, enter the housing Building Owner's Recordkeeping credit dollar amount allowable under section 42(h)(4). Keep the following items in your records for three years after Line 2. The maximum applicable credit percentage the due date (including extensions) of the owner's tax return allowable is determined in part by the date the building was for the tax year that includes the end of the 15-year placed in service.

9 Follow the Instructions pertaining to the compliance period. date the building was placed in service. A copy of the original form 8609 received from the Enter the maximum applicable credit percentage housing agency and all related Forms 8609-A (or allowable to the building for the month the building was predecessor Schedules A ( form 8609)), Forms 8586, and placed in service or, if applicable, for the month determined any Forms 8611, Recapture of Low-Income Housing Credit. under section 42(b)(1)(A)(ii). This percentage may be less If the maximum applicable credit percentage allowable on than the applicable percentage published by the IRS monthly line 2 reflects an election under section 42(b)(1)(A)(ii), (or in the Internal Revenue Bulletin. former section 42(b)(2)(A)(ii), for buildings placed in service before July 31, 2008), a copy of the election statement. A minimum applicable credit percentage of 9% is in If the binding agreement specifying the housing credit !

10 Effect for new non-federally subsidized buildings CAUTION placed in service after July 30, 2008. The 9%. dollar amount is contained in a separate document, a copy of the binding agreement. minimum applies to new non-federally subsidized buildings If the housing credit dollar amount allocated on line 1b even if the taxpayer made an irrevocable election under reflects an allocation made under section 42(h)(1)(E) or former section 42(b)(1)(A)(ii). If this circumstance applies, section 42(h)(1)(F), a copy of the allocation document. don't enter less than 9% on line 2. See section 42(b)(2). If an election was made under section 42(b)(1)(A)(ii) to Specific Instructions use the applicable percentage for a month other than the month in which a building is placed in service, the Part I Allocation of Credit requirements of Regulations section must be met. The agency must keep a copy of the binding agreement.