Here’s What Historic Building Owners Should Know About the Rehabilitation Tax Credit

Organizations around the country continue to promote historic buildings and other important heritage sites. The rehabilitation tax credit offers an incentive to renovate and restore old or historic buildings. Here are some important points about this credit:

● The credit is 20 percent of the taxpayer’s qualifying costs for rehabilitating a building.

● The credit doesn’t apply to the money spent on buying the structure.

● The legislation now requires taxpayers take the 20 percent credit spread out over five years beginning in the year they placed the building into service.

● The law eliminates the 10 percent rehabilitation credit for pre-1936 buildings, but a transition rule allows owners of either a certified historic structure or a pre-1936 building to use the prior law if the project meets certain conditions.

● Taxpayers use Form 3468, Investment Credit, to claim the rehabilitation tax credit and a variety of other investment credits. Form 3468 instructions have detailed requirements for completing the form.