TCS Annual Owner Certification and IRS Reporting 3

Question 1

In which year must a LIHTC building owner first complete Part II of IRS Form 8609?

Accepted Answer

The first year of the credit period when credits are claimed

Answer

Part II of Form 8609 must be completed by the building owner and filed with their tax return in the first year of the credit period when credits are first claimed.

Question 2

For how many years does a LIHTC building owner typically claim tax credits on their annual tax returns?

Accepted Answer

10 years

Answer

Tax credits are claimed over a 10-year credit period beginning with the placed-in-service date, even though the compliance period extends to 15 years.

Question 3

If noncompliance occurs during the LIHTC compliance period, what financial consequence may the IRS impose regarding previously claimed credits?

Accepted Answer

Recapture of previously claimed credits plus interest

Answer

If noncompliance occurs during the 15-year compliance period, the IRS can recapture previously claimed credits and impose an interest charge on the recaptured amount.

Question 4

How does the IRS typically learn about LIHTC noncompliance events in order to evaluate potential credit recapture?

Accepted Answer

Form 8823 filings submitted by state housing agencies

Answer

The IRS learns about LIHTC noncompliance primarily through Form 8823 reports filed by state housing credit agencies, which serve as the trigger for IRS review.

Question 5

The 'placed-in-service date' is a critical milestone under Section 42 because it marks the beginning of which two periods?

Accepted Answer

The compliance period and the credit period

Answer

The placed-in-service date starts both the 15-year compliance period and the 10-year credit period, making it the foundational timing reference for all LIHTC obligations.

TCS - Tax Credit Specialist Practice Test

TCS - Tax Credit Specialist Practice Test

TCS Annual Owner Certification and IRS Reporting 3