Current through Register 1531, September 27, 2024
(1)
Transferors, Transferees.
(a) Any taxpayer with an ownership interest in a
qualified Massachusetts project with respect to which there has been allocated
Massachusetts standard LIHTC and any taxpayer to whom the right to claim
Massachusetts standard LIHTC has been allotted or transferred may transfer the right
to claim unclaimed Massachusetts standard LIHTC to any other Massachusetts taxpayer
without the necessity of transferring any ownership interest in the original project
or any interest in the entity which owns the original project. The transferor may
transfer all or any portion of tax credits issued, sold, or assigned to parties who
are eligible under the provisions of M.G.L. c. 62, § 6I(c)(1), and M.G.L. c.
63, § 31H(f)(1).
(b) Any taxpayer
making a qualified donation with respect to a qualified Massachusetts project with
respect to which there has been allocated Massachusetts donation LIHTC may transfer
its right to claim donation LIHTC after the qualified donation has been made, and
any taxpayer to whom the right to claim Massachusetts donation LIHTC has been
allotted or transferred may transfer the right to claim unclaimed Massachusetts
donation LIHTC to any other Massachusetts taxpayer without the necessity of any
further transfer of ownership interest in the original project or in the taxpayer
making the qualified donation.
(c) For
treatment of carry forward credit with respect to both donation LIHTC and standard
LIHTC, see
760 CMR
54.10.
(2)
Transfer Contract
Requirements. A taxpayer, owning an interest in a qualified
Massachusetts project or to whom the right to claim Massachusetts low-income housing
tax credit has been allotted or transferred, who transfers his, her or its credit
such that credit may be claimed by a taxpayer without ownership in the project and
without an interest in the entity that owns the project must enter into a transfer
contract with the transferee. The transfer contract must specify the following:
(a) Building Identification Numbers for all
buildings in the project as of the date of transfer;
(b) in the case of a standard LIHTC, the date each
building in the project was placed in service, and in the case of a donation tax
credit the date that the qualified donation was made;
(c) the 15-year compliance period for the
project;
(d) in the case of a standard
LIHTC, the schedule of years during which the credit may be claimed and the amount
of credit previously claimed; and
(e)
the taxpayer or taxpayers that are responsible for paying recapture if recapture
should occur.
The transferring party shall attach a copy of this contract to the
transfer statement required under
760 CMR
54.13(4).
(3)
Transferred Eligibility
to Claim Credit. Any taxpayer who is a transferee of the right to claim
a Massachusetts low-income housing tax credit with respect to a qualified
Massachusetts project may, provided all transfer requirements and all other
requirements for claiming such credit are met, claim such credit notwithstanding the
fact that the credit may initially have been allocated to a taxpayer paying a
different income tax (i.e., personal or corporate)
(4)
Sale of Credit is Sale of Capital
Asset. The sale of Massachusetts low-income housing tax credit will be
treated as the sale of a capital asset under the Massachusetts personal income tax
or the net income measure of the corporate excise.
(5)
Examples. The
following examples illustrate the application of 760 CMR 54.07:
(a)
Example 1. If
taxpayer X receives an allotment of Massachusetts low-income housing tax credit as a
partner in a partnership that owns a qualified Massachusetts project, taxpayer X may
transfer the Massachusetts low-income housing tax credit allotted to it to taxpayer
Y, whether or not taxpayer Y is a partner in the partnership.
(b)
Example 2. Credit is
allocated with respect to a project owned by a limited liability company and
allotted to individuals who are members in the company. One of the members may sell
his or her credit to a corporation, whether or not such corporation is a member in
the company.
