Page 383 - Small Business IRS Training Guides

 If in a national register district, the building must be decertified for a Pre-1936 or certified by the NPS as
contributing to a district to qualify as a certified historic structure

 The rehabilitation of a certified historic structure also must be certified by the NPS

• The expenditures must be QREs (capital expenditures related to the building and structural components) and
incurred in connection with the rehabilitation of a qualified rehabilitated building

• The year the qualified rehabilitated building was placed in service

• The substantial rehabilitation test must be met

The substantial rehabilitation test must end in in the year the building is placed in service. The taxpayer picks the date for

the end of the test period. From the end date you go back 24 months or 60 months to determine the start date of the test

period. To qualify under the transition rules the test date must begin by June 20, 2018.

The qualified expenditures during the test period must exceed the adjusted basis on the first day of the test period.

If the test is not met, then no credit may be claimed. If the test period is met, then the taxpayer may claim the credit on
qualified expenditures before the test period, during the test period and through the end of the year that the building is

placed in service.

A credit claimed under the transition rules with a 24-month test period must be place in service no later than 2020 and a
phase of a project placed in service under the 60-month rule must be placed in service no later than 2023.

While the taxpayer may be entitled to a credit in a current year, he may not be able to utilize it due to other limitations
such as basis, at risk, and passive activity loss rules. In general, the credit can be carried back 1 year and forward

20 years.

For more detail go to the rehabilitation tax credit page on irs.gov.

73233-102 13402-8 Tax Cuts and Jobs Act