Historic Preservation tax credits are a way for homeowners, and more often, businesses, to justify putting money into preserving our built heritage.
However, the Fourth Circuit U.S. Court of Appeals has ruled that a business partnership using the tax credits to restore a historic commercial building is a "disguised sale" of property that is therefore subject to federal income tax, as opposed to a distribution of tax benefits among partners. This means that 35% of of an investor's capital contribution to a project is now being collected by the U.S. Treasury. On a $2 milliion project, this means that $700,000 of financing disappears.
The National Trust for Historic Preservation is calling for the Court to reconsider this important ruling which could mark the end of preservation tax credits as we know them. Stay tuned for more and see the National Trust details at http://www.preservationnation.org/issues/rehabilitation-tax-credits/us-court-of-appeals-for-the.html