Instructions For Form 8609 - 2016 (Page 4 of 5) in pdf

For new buildings, the eligible basis is generally the cost

Two or more qualified low-income buildings may be

of construction or rehabilitation expenditures incurred under

included in a multiple building project only if they:

section 42(e).

Are located on the same tract of land (including contiguous

parcels), unless all of the dwelling units in all of the buildings

For existing buildings, the eligible basis is the cost of

being aggregated in the multiple building project are rent

acquisition plus rehabilitation expenditures not treated as a

restricted units (see section 42(g)(7));

separate new building under section 42(e) incurred by the

Are owned by the same person for federal tax purposes;

close of the first year of the credit period.

Are financed under a common plan of financing; and

If the housing credit agency has entered an increased

Have similarly constructed housing units.

percentage in Part I, line 3b, multiply the eligible basis by the

A qualified low-income building includes residential rental

increased percentage and enter the result.

property that is an apartment building, a single-family

Residential rental property may qualify for the credit even

dwelling, a town house, a row house, a duplex, or a

though part of the building in which the residential rental units

condominium.

are located is used for commercial use. Do not include the

cost of the nonresident rental property. However, you may

Line 9a. Follow the instructions that apply for the date the

generally include the basis of common areas or tenant

building was placed in service.

facilities, such as swimming pools or parking areas, provided

You may elect to reduce the eligible basis by the proceeds

there is no separate fee for the use of these facilities and they

of any tax-exempt obligation and claim the 70% present

are made available on a comparable basis to all tenants in

value credit on the remaining eligible basis. A minimum

the project.

applicable percentage of 9% is in effect for new non-federally

The eligible basis shall not include any costs paid by the

subsidized buildings placed in service after July 30, 2008,

proceeds of a federal grant. Also, reduce the eligible basis by

unless the housing credit agency determines a lesser amount

the entire basis allocable to non-low-income units that are

is necessary to assure project feasibility. However, if you

above average quality standard of the low-income units in the

make this election, you may not claim the 30% present value

building. You may, however, include a portion of the basis of

credit on the portion of the basis that was financed with the

these non-low-income units if the cost of any of these units

tax-exempt obligation.

does not exceed by more than 15% the average cost of all

Line 9b. See the instructions for Part II, line 7.

low-income units in the building, and you elect to exclude this

excess cost from the eligible basis by checking the “Yes” box

Line 10a. You may elect to begin the credit period in the tax

for line 9b. See section 42(d)(3).

year after the building is placed in service. Once made, the

election is irrevocable.

You may elect to reduce the eligible basis by the proceeds

of any tax-exempt obligation to obtain a higher credit

Note. Section 42(g)(3)(B)(iii) provides special rules for

percentage. To make this election, check the “Yes” box in

determining the start of the credit period for certain multiple

Part II, line 9a. Reduce the eligible basis by the obligation

building projects.

proceeds before entering the amount on line 7. You must

reduce the eligible basis by such obligation proceeds before

Line 10b. Partnerships with 35 or more partners are treated

multiplying the eligible basis by the increased percentage in

as the taxpayer for purposes of recapture unless an election

Part I, line 3b.

is made not to treat the partnership as the taxpayer. Check

the “Yes” box if you do not want the partnership to be treated

Line 8a. Multiply the eligible basis of the building shown on

as the taxpayer for purposes of recapture. Once made, the

line 7 by the smaller of the unit fraction or the floor space

election is irrevocable.

fraction as of the close of the first year of the credit period

and enter the result on line 8a. Low-income units are units

Line 10c. You must meet the minimum set-aside

occupied by qualifying tenants, while residential rental units

requirements under section 42(g)(1) for the project by

are all units, whether or not occupied. See the instructions for

electing one of the following tests.

Part I, line 3a.

20-50 Test. 20% or more of the residential units in the

project must be both rent restricted and occupied by

Line 8b. Each building is considered a separate project

individuals whose income is 50% or less of the area median

under section 42(g)(3)(D) unless, before the close of the first

gross income or

calendar year in the project period (defined in section 42(h)

40-60 Test. 40% or more of the residential units in the

(1)(F)(ii)), each building that is (or will be) part of a multiple

project must be both rent restricted and occupied by

building project is identified by attaching the statement

individuals whose income is 60% or less of the area median

described below.

gross income.

The statement must be attached to this Form 8609 and

Gulf Opportunity (GO) Zone. For purposes of the 20-50

include:

and 40-60 tests defined above, the “national

The name and address of the project and each building in

non-metropolitan median gross income” will be substituted

the project,

for the “area median gross income” for all property placed in

The BIN of each building in the project,

service during 2006, 2007, or 2008 in a nonmetropolitan area

The aggregate credit dollar amount for the project, and

in the Gulf Opportunity (GO) Zone.

The credit allocated to each building in the project.

Once made, the election is irrevocable.

Notwithstanding a checked “Yes” box on line 8b,

Note. Owners of buildings in projects located in New York

failure to attach a statement providing the above

City may not use the 40-60 Test. Instead, they may use the

required information will result in each building being

CAUTION

25-60 Test. Under the 25-60 Test, 25% or more of the

considered a separate project under section 42(g)(3)(D). The

residential units in the project must be both rent restricted

minimum set-aside requirement (see the instructions for

line 10c) is a project-based test.

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Instructions for Form 8609 (1-2016)

Instructions For Form 8609 - 2016 Page 4

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