Form 8703 - Annual Certification Of A Residential Rental Project (Page 3 of 4) in pdf

Form 8703 (Rev. 9-2013)

Page

Future Developments

Part II—Annual Determinations

The amended return must provide all the

information reported on the original return, in

The IRS has created a page on IRS.gov for

Line 5. Enter the total number of residential

addition to the new or corrected information.

information about Form 8703 and its

rental units in the project.

Attach an explanation of the reason for the

instructions, at

Line 6. Enter the number of residential rental

amended return.

Information about any future developments

units occupied by individuals whose income

Report number. This line is for IRS use only.

affecting Form 8703 (such as legislation enacted

is:

Do not make an entry.

after we release it) will be posted on that page.

(a) 50% or less of the area median gross

Line 1. To be a qualified residential rental

income (if box 1a was checked),

General Instructions

project, one of the following tests must have

(b) 60% or less of the area median gross

been elected for the project:

Section references are to the Internal Revenue

income (if box 1b, 1c, or 1d was checked),

(a) 20-50 test. 20% or more of the residential

Code unless otherwise noted.

units must be occupied by individuals whose

Purpose of form. Form 8703 is used by an

income is 50% or less of the area median

income (if box 1e was checked).

operator of a residential rental project to

gross income.

provide annual information the IRS will use to

Do not include any units included on line 7.

(b) 40-60 test. 40% or more of the residential

determine whether a project continues to be a

Line 7. Enter the number of residential rental

units must be occupied by individuals whose

qualified residential rental project under

units occupied by continuing residents whose

income is 60% or less of the area median

section 142(d). If so, and certain other

income exceeds the applicable income limit

gross income.

requirements are met, bonds issued in

but whose income is treated as not exceeding

connection with the project are considered

the applicable income limit. Do not include

“exempt facility bonds” and the interest paid

residential units must be occupied by

any units included on line 6. See section

on them is not taxable to the recipient.

individuals whose income is 60% or less of the

142(d)(3)(B).

area median gross income.

Who must file. The operator of a residential

Line 9. If line 9 is less than the percentage for

rental project for which an election was made

(d) 20-60 test (Gulf Opportunity (GO) Zone,

the test elected in item 1, Part I (i.e., 20%,

under section 142(d) must file Form 8703

Midwestern disaster areas, and Hurricane

40%, or 25%), the project is considered in

annually. A separate Form 8703 must be filed

Ike disaster areas only). 20% or more of the

post-issuance noncompliance. In this case,

for each project.

residential units must be occupied by

check the box in Part IV to certify that the

individuals whose income is 60% or less of the

When to file. File Form 8703 by March 31

project “does not meet” the requirements of

area median gross income.

after the close of the calendar year for which

section 142(d).

the certification is made. Form 8703 must be

(e) 40-70 test (GO Zone, Midwestern disaster

In general, unless the noncompliance is

filed annually during the qualified project

areas, and Hurricane Ike disaster areas

corrected within a reasonable period, the

period. See the instructions for line 2 for the

only). 40% or more of the residential units must

noncompliance will cause the exempt facility

definition of “qualified project period.”

be occupied by individuals whose income is

bonds for the project to not be qualified

70% or less of the area median gross income.

Where to file. File Form 8703 with the:

bonds under section 141. When the bonds

Internal Revenue Service

are no longer qualified, the interest paid or to

See Rev. Rul. 94-57, 1994-2 C.B. 5, for

Service Center

be paid on the bonds is taxable, and the

guidance on computing the income limits

Ogden, UT 84201

issuers or brokers of the bonds must report

applicable to these tests. See Pub. 4492,

the taxable interest to bond holders as

Information for Taxpayers Affected by

Penalty. Section 6652(j) provides for a penalty

required by section 6049. See Regulations

Hurricanes Katrina, Rita, and Wilma, for details

of $100 for each failure to comply with the

sections 1.103-8(b)(1)-(9) and sections 141,

about the GO Zone. See Pub. 4492-B,

section 142(d)(7) certification requirements

142, and 103 for additional information.

Information for Affected Taxpayers in the

unless it can be shown that failure to file is due

Midwestern Disaster Areas, for details about the

to reasonable cause and not to willful neglect.

Lines 10a and 10b. Complete these lines only

Midwestern Disaster areas.

if an election was made to treat the project as

Questions on filing Form 8703. For specific

a deep-rent skewed project under section

Line 2. The qualified project period is the

questions on how to file Form 8703, send an

142(d)(4). The 15-40 test that applies to the

period beginning on the first day that 10% of

email to the IRS at:

deep-rent skewed project election is not an

the residential units are occupied and ending on

TaxExemptBondQuestions@irs.gov

additional test for satisfying the requirements

the latest of (a) the date that is 15 years after the

Put "Form 8703 Question" in the subject

of section 142(d)(1). The 15-40 deep-rent

date that 50% of the residential units are

line. In the email, include a description of your

skewed project test relates to the

occupied, (b) the first day that no tax-exempt

question, a return email address, the name of

determination of a low-income tenant’s

private activity bond issued for the project is

a contact person, and a telephone number.

income. Generally, a continuing resident’s

outstanding, or (c) the date that any assistance

income may increase but not exceed 140% of

provided for the project under section 8 of the

Specific Instructions

the applicable income limit (i.e., 50% or less

United States Housing Act of 1937 terminates.

or 60% or less of the area median gross

Lines 3a and 3b. If a low-income housing

income under the line 1a or 1b test). When

Part I—General Information

credit allocation was issued for more than one

the deep-rent skewed election is made and

building in the project, attach a schedule

Enter the name, address (including ZIP or

the requirements of section 142(d)(4)(B) are

listing the building identification number (BIN)

foreign postal code), and taxpayer identification

met, the income of a continuing resident may

for each building.

number of both the operator and the owner of

increase up to 170% of the applicable income

the project. Enter the address of the project. Do

Line 4. The determination of whether the

limit. If this election is made, at least 15% of

not use P.O. boxes.

income of a resident of a unit in a project

all low-income units in the project must be

exceeds the applicable income limit shall be

occupied by tenants whose income is 40% or

Amended return. An issuer may file an

made at least annually on the basis of the

less of the area median gross income.

amended return to change or add to the

current income of the resident, except for

information reported on a previously filed

On line 10a, enter the number of

respect to any project for any year if during

return for the same date of issue. If you are

low-income units occupied by individuals

such year no residential unit in the project is

filing to correct errors or change a previously

whose income is 40% or less of the area

occupied by a new resident whose income

filed return, check the "Amended Return" box

median gross income. Also include the

exceeds the applicable income limit. See

in the heading of the form.

number of units occupied by continuing

section 142(d)(3)(A). Check "Yes" if there are

residents whose income is treated as not

no new residents in the project whose income

exceeding the applicable income limit. If the

exceeds the applicable income limits.

percentage on line 10b is less than 15%, the

Therefore, if “Yes” is checked, complete Part

project is not a deep-rent skewed project, and

II, skipping lines 6 through 10.

a continuing resident’s income may not

increase above 140% of the applicable

income limit for purposes of section 142(d).

Form 8703 - Annual Certification Of A Residential Rental Project Page 3

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