Historical Tax Credits
The Historic Tax Credit was established for older buildings to incentivize property owners to invest in the rehabilitation of historic buildings. This credit has contributed billions of dollars for the rehabilitation of historic buildings throughout the United States.
The 20% Historic Tax Credit is typically used for the rehabilitation of historic buildings that must be income producing, listed on the National Register and the improvements must meet certain standards criteria. The tax credit must be utilized over a 5 year span. The tax credit can be utilized by the owner, developer as well as investors and apply to rehabilitation, design fees and soft costs.
A Cost Segregation study can be performed on the acquisition of these properties as well as the renovations that take place. The Cost Segregation study identifies personal and real property for excelerated depreciation purposes. A Partial Asset Disposition study can also be incorporated as well to expense the left over basis of those items that were removed from the structure.