LIHTC Property Management & Compliance Monitoring 3

Question 1

What is the primary consequence for a LIHTC investor when a qualified building experiences a decrease in its qualified basis during the 15-year compliance period?

Accepted Answer

Previously claimed tax credits are subject to recapture plus interest

Answer

Accelerated depreciation is suspended for one year

Answer

The property management contract is automatically terminated

Answer

TCAC revokes the remaining allocation commitment

Question 2

California's TCAC typically requires LIHTC properties to maintain affordability for how many years total?

Accepted Answer

55 years

Answer

15 years

Answer

30 years

Answer

99 years

Question 3

Which IRS form is used to establish the credit amount, placed-in-service date, and minimum set-aside election for each LIHTC building?

Accepted Answer

Form 8609

Answer

Form 8586

Answer

Form 8823

Answer

Form 3800

Question 4

Under LIHTC regulations, 'good cause eviction' protection means that owners:

Accepted Answer

Cannot evict a qualified low-income tenant without legally valid cause such as nonpayment of rent or material lease violations

Answer

May evict qualified tenants at any time with 30 days written notice

Answer

Must obtain TCAC approval before serving any eviction notice

Answer

May only evict tenants who have become over-income

Question 5

The 'applicable fraction' used to calculate a LIHTC project's qualified basis is defined as:

Accepted Answer

The lesser of the unit fraction or the floor space fraction of qualified low-income units

Answer

The percentage of total development cost funded by the tax credit equity

Answer

The ratio of tax credit equity to permanent debt in the capital stack

Answer

The percentage of gross income derived from affordable rent payments

Question 6

Which method is an acceptable way to verify a LIHTC applicant's employment income at move-in certification?

Accepted Answer

Third-party written verification from the employer confirming wages and hours

Answer

Self-certification by the applicant alone with no supporting documents

Answer

A verbal statement provided by the previous landlord

Answer

An estimate based on the neighborhood's average wage data

Question 7

Under IRC Section 42, which event would most directly trigger a credit recapture for a LIHTC investor?

Accepted Answer

A significant decrease in the project's qualified basis during the 15-year compliance period

Answer

Occupancy falling below 100% for more than 30 days

Answer

Turnover of the property management company

Answer

The sale of a partnership interest between existing limited partners