Final regs issued on rehabilitation credit

Tax Hot Topics newsletter The IRS has released final regulations (TD 9915) implementing changes to the Section 47 rehabilitation credit made by the Tax Cuts and Jobs Act (TCJA). The final regulations adopt proposed regulations issued in May without modification.

The TCJA made several changes to the rehabilitation credit, most notably requiring it to be claimed ratably over a five-year period beginning in the taxable year in which qualified rehabilitated building is placed into service. The IRS issued proposed regulations to provide guidance on how this change would affect taxpayers claiming the credit, along with other conforming amendments and examples under the Section 47 regulations.

The final regulations adopt the proposed regulations without modification. They apply to taxable years on or after the date they are published in the Federal Register. However, taxpayers may choose to apply them for qualified rehabilitation expenditures paid or incurred after Dec. 31, 2017, in taxable years beginning before the date the final rules are published in the Federal Register, so long as they do so entirely and consistently.

Omair Taher
Washington National Tax Office
T  +1 202 861 4143

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