TCS Annual Owner Certification and IRS Reporting 1 — Questions and Answers
Question 1: What IRS form is issued by the state housing credit agency to certify the Low-Income Housing Tax Credit allocation for a building?
- Form 3800
- Form 8609 (Correct answer)
- Form 8823
- Form 8609-A
Correct answer: Form 8609
Form 8609, the Low-Income Housing Credit Allocation and Certification, is issued by the state allocating agency to certify the credit amount for each qualified building.
Question 2: Which part of IRS Form 8609 is completed and signed by the state housing credit agency?
- Part I (Correct answer)
- Part II
- Part III
- Schedule A
Correct answer: Part I
Part I of Form 8609 is completed and signed by the state allocating agency to certify the credit allocation amount and building information.
Question 3: What IRS form must a LIHTC building owner file annually with their tax return throughout the credit period to document ongoing compliance?
- Form 8609
- Form 8823
- Form 3800
- Form 8609-A (Correct answer)
Correct answer: Form 8609-A
Form 8609-A, the Annual Statement for Low-Income Housing Credit, must be filed annually with the owner's tax return throughout the 15-year compliance period.
Question 4: Which entity is responsible for filing IRS Form 8823 when LIHTC noncompliance is identified?
- The property owner
- The property manager
- The state housing credit agency (Correct answer)
- The IRS field examiner
Correct answer: The state housing credit agency
State housing credit agencies are required to file Form 8823 with the IRS whenever noncompliance is identified or when a building disposition occurs.
Question 5: IRS Form 8823 is titled the Low-Income Housing Credit Agencies Report of Noncompliance or what other triggering event?
- Tenant Grievance
- Building Disposition (Correct answer)
- Credit Reduction
- Agency Certification
Correct answer: Building Disposition
Form 8823 is used to report either noncompliance events or building dispositions (such as ownership transfers) to the IRS.
Question 6: What is the length of the initial compliance period for Low-Income Housing Tax Credit properties under Section 42?
- 10 years
- 15 years (Correct answer)
- 20 years
- 30 years
Correct answer: 15 years
The LIHTC compliance period is 15 years, during which the owner must maintain income and rent restrictions or risk credit recapture.
Question 7: Including the extended use period, for how many total years from the placed-in-service date must most LIHTC properties maintain affordability restrictions?
- 15 years
- 20 years
- 25 years
- 30 years (Correct answer)
Correct answer: 30 years
Most LIHTC properties must maintain affordability for 30 years: the initial 15-year compliance period plus an additional 15-year extended use period.
TCS Annual Owner Certification and IRS Reporting 1
What IRS form is issued by the state housing credit agency to certify the Low-Income Housing Tax Credit allocation for a building?