Page 368 - Small Business IRS Training Guides

Tax Cuts and Jobs Act

Provision 13402

Rehabilitation Tax Credit

Overview

Introduction

The investment tax credit is allowable for certain depreciable property including the rehabilitation of a qualified building.

Under prior law a qualified building may be eligible for one of two tax credits a:

• 20 percent credit for a qualified rehabilitation of a “certified historic structure”

• 10 percent credit for the rehabilitation of a non-historic building built before 1936

The Tax Cuts and Jobs Act of 2017 (TCJA) repealed the 10 percent credit for pre-1936 buildings for amounts paid or

incurred after December 31, 2017. The Act retains the 20 percent credit for qualified rehabilitation expenditures with

respect to a certified historic structure, with the modification that the qualified rehabilitation expenditures generally are
allowed ratably during the 5-year period beginning in the tax year in which the qualified rehabilitated building is placed

in service.

A transition rule is provided.

This lesson will explain the basic requirements to qualify for each credit, the transition rule and the carryforward of

unused credit.

73233-102 13402-1 Tax Cuts and Jobs Act