IRS Guidance for Electing Real Property Trade or Business

While the Tax Cuts and Jobs Act greatly restricts business interest deductions under section 163(j), it provides an exemption for an “electing real property trade or business.” In the last two months of 2018, the IRS published significant guidance addressing how to make the election and the impact of the election on property required, as a result, to use the Alternative Depreciation System. In this alert, we discuss (i) the mechanics of making the election and (ii) the effect of the election on depreciation, including for property placed in service before 2018.

For a PDF of the entire alert, please click here

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This client alert is intended as a source of information for clients and friends of Klein Hornig LLP. The content should not be construed as legal advice, and readers should not act upon information in this publication without professional counsel. This client alert may be considered advertising under certain rules of professional conduct. Copyright © 2019 Klein Hornig LLP, All rights reserved.

HUD Seeking Feedback on Draft Section 202 PRAC RAD Conversion Guidance

Last year, Congress authorized conversions of properties currently assisted by Section 202 Project Rental Assistance Contracts (PRAC) to project-based vouchers (PBV) or project-based rental assistance (PBRA) under HUD’s Rental Assistance Demonstration (RAD) program. On February 26, 2019, HUD posted draft implementation guidance for such “RAD-for-PRAC” conversions (Draft Guidance) and requested public feedback by March 12th.

For a PDF of the entire alert, click here.

UPDATE:: Klein Hornig LLP provided comments on the draft implementation guidance on March 12, 2019. To view the comments, click here

To be added to the Klein Hornig LLP Housing Alert distribution list, please contact Amanda Cote (acote@kleinhornig.com).

Klein Hornig tax partners, Steve Paul & Katie Day are pleased to provide the 2019 Edition of the Low-Income Housing Tax Credit outline, which has been distributed for more than 20 years.

Klein Hornig associates, Rebecca Melaas and Matt Woodbury are gratefully recognized as contributors.

For a PDF of the entire booklet, please click the link below.

2019 Low-Income Housing Tax Credit Outline

New HUD Notice Announces Funding for Tenant Protection Vouchers and Project-Based Voucher Assistance for Certain Subsidized/Affordable Projects

Earlier this month HUD issued a new Notice (Notice PIH 2019-01/H 2019-02: the “Notice”) setting-aside $5,000,000 in funding for Tenant Protection Voucher (“TPV”) funding that is available to provide tenant-based Enhanced Vouchers (“EVs”) and/or Project-Based Voucher (“PBV”) assistance to certain “at-risk households” living in HUD-defined “low-vacancy areas.” The $5 million set-aside is in addition to prior funding that remains available and was previously announced in earlier HUD notices. Under the Notice, property owners have the option to obtain either tenant-based EVs or PBV assistance for eligible projects. The EVs and PBVs are often critical to the protection of low-income households that are impacted by the termination of existing HUD affordability restrictions on the properties where they live. The EVs and PBVs also provide critical rental revenue to property owners and often help facilitate owners’ rehabilitation/redevelopment efforts.

For a .pdf of the entire alert, please click here.

To be added to the Klein Hornig LLP Housing Alert distribution list, please contact Amanda Cote (acote@kleinhornig.com).

HUD Shutdown Ends, At Least For Three Weeks

On January 25th, the President and Congress approved a short-term Continuing Resolution (“CR”) to reopen the federal government for three weeks. While there remains a possibility of another partial government shutdown when the three-week period ends on February 15th, the CR allowed HUD to resume normal operations on January 28th. Since their return, HUD employees have been making their way through a significant backlog of work that accrued during the 35-day partial government shutdown period. At the end of last week, HUD Multifamily issued new guidance (the “HUD Guidance”) describing how it would prioritize its work going forward relating to certain multifamily asset management and loan processing/closing functions.

For a PDF of the entire alert click here.

To be added to the Klein Hornig LLP Housing Alert distribution list, please contact Amanda Cote (acote@kleinhornig.com).

HUD Shutdown Already Impacting HUD-Assisted Housing and FHA Loan Closings.

By: Stephen Niles and Jessica Cassella

The stalemate continues. The partial shutdown of the federal government, affecting HUD and several other government agencies, is now in its 19th day. Approximately 95% of HUD’s employees nationwide are now “furloughed” – meaning that they are legally prohibited from working on HUD matters. In addition, while HUD has “excepted/intermittent” personnel that are required to report to work during the shutdown, they are only supposed to work on certain types of critical matters such as those affecting life or safety. Given how difficult it is these days to find anyone at HUD for guidance on the shutdown, we have summarized below some “highlights” of the limited information shared in recent days by HUD, and some affordable housing industry representatives, relating to the shutdown’s impact on HUD’s rental assistance and FHA loan programs.

For a .PDF of the entire alert, please click here.

To be added to the Klein Hornig LLP Housing Alert distribution list, please contact Amanda Cote (acote@kleinhornig.com).

It has been another successful and busy year at Klein Hornig. We are especially grateful to our clients, staff and all those who help us to develop and preserve affordable housing and revitalize communities with legal solutions that are smart, efficient and durable.

In 2018 we welcomed 10 new attorneys: Adam Norlander, Ann Chiacchieri, Akritee Agarwal, Daniel Fojas, Jess Worthington, Jessie Cassella, Kurt Stiegel, Matt Woodbury, Peter Lubershane and Sarah Markenson-Bussel.

We look forward to working with you in 2019!