IRS Issues Guidance on Partnerships Claiming Historic Rehabilitation Credit

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The Internal Revenue Service won't challenge tax credits for certain historic rehabilitation projects if they are distributed among partners in a way that satisfies safe harbor requirements defined in a new revenue procedure.
In Revenue Procedure 2014-12, released Dec. 30, the IRS said a principal must have a 1 percent interest at a minimum in each material item of partnership income, gain, loss, deduction and credit at all times during the existence of the partnership in order to qualify for the Section 47 historic rehabilitation tax credit.
In addition, an investor needs to maintain at least a 5 percent interest in each of those material items for the taxable year for which the investor's percentage share of that item is the largest.

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