Document 6511425

News, Analysis and Commentary On Affordable Housing, Community Development and Renewable Energy Tax Credits
May 2011, Volume II, Issue V
Published by Novogradac & Company LLP
Q&A Working with the National Park Service –
How to Qualify a Building for the
Historic Tax Credit
By Tom Boccia, CPA, Novogradac & Company LLP
Q
A
uestion: In order for my project to realize historic
tax credits (HTCs), what is the National Park Service
(NPS) process to qualify my building?
nswer: To qualify for historic tax credits, the building
must be considered to be a certified historic structure
(CHS). A CHS, as defined under the Internal Revenue
Code (IRC), is “any building and its structural components
which: is listed in the National Register of Historic Places, or
is located in a registered historic district and is certified by
the Secretary of the Interior to the Secretary of the Treasury
(IRS) as being of historic significance to the district.”
As noted, the building itself can be listed on the National
Register or the building can be located within a historic district. First, an NPS Form 10-168, Historic Preservation Certification Part 1 – Evaluation of Significance (Part 1) must
be filed with the NPS by a building owner whose property
is not listed on the National Register (owners of building
listed on the National Register do not need to request this
determination). The NPS determines whether a building
contributes to the historic significance of a district based
on whether its “…location, design, setting, materials, workmanship, condition of structure, building age, feeling and
association adds to the district’s sense of time and place and
historical development.” See NPS 36 CFR 67 for more details. Part I is generally filed with the respective State Historic Preservation Office (SHPO) prior to commencing any
of the rehabilitation work.
Next, in order to qualify for the HTCs, the building must not
only be a CHS but the rehabilitation must also be a certified
rehabilitation. A certified rehabilitation is defined in the IRC
as “any rehabilitation of a CHS which the Secretary of the
Interior has certified to the Secretary of the Treasury (IRS)
as being consistent to the character of such property or the
district in which such property is located.” This step is accomplished by filing Historic Preservation Certification Part
2 – Description of Rehabilitation (Part 2). Part 2 documents
the actual work to be performed on the building to determine whether the proposed work as outlined in the architectural plans, specifications and other detailed information
about the rehabilitation will be consistent with the historic
significance of the building or district so that the building
work will qualify as a certified rehabilitation. Part 2 also
must contain documentation that documents the building’s
appearance, site and environment prior to the commencement of any of the rehabilitation. At this point, the NPS then
makes one of three possible determinations regarding the
Part 2 submission: the proposed rehabilitation is deemed to
meet the historic standards of the NPS (pending certification
of completed work); conditional approval is made subject to
certain revisions in the proposed rehabilitation work; or the
application is rejected because the proposed rehabilitation
does not meet the historic standards of the NPS (although
owner may resubmit after making corrections).
Finally, upon completion of the rehabilitation work, the
owner must submit a completed Historic Preservation Certification Part 3 – Request for Certification of Completed
Work (Part 3). In this step, the NPS certifies that the work
was completed in accordance with the Secretary of the Interior’s Standards for Historic Rehabilitation. At this time,
NPS is provided with two important pieces of information.
continued on page 2
NOVOGRADAC JOURNAL OF TAX CREDITS
continued from page 1
The first provides the starting date of the rehabilitation and the
date the work was completed and placed in service. The second
includes the following: total costs attributable to the CHS (both
qualifying and non-qualifying costs) and costs attributed to new
construction (including site work, parking lots, etc.). The final
NPS Certification (an approved Part 3) must be received no more
than 30 months after the filing date of the tax return on which the
credit is claimed.
Novogradac Journal of Tax Credits
Editorial Board
PUBLISHER
Michael J. Novogradac, CPA
MANAGING EDITOR
Alex Ruiz
EDITOR
Jane Bowar Zastrow
TECHNICAL EDITORS
This process for claiming the HTCs can be complex and cumbersome. Understanding the processes and working closely with historic advisors on the steps involved and the timing of when the
applications are submitted, among others, is critical in order to be
certain the HTCs that have been claimed will not be disallowed.
This article first appeared in the May 2011 issue of the Novogradac Journal of Tax Credits.
© Novogradac & Company LLP 2011 - All Rights Reserved
Notice pursuant to IRS regulations: Any U.S. federal tax advice contained in this article is not intended to be used, and cannot be used, by any
taxpayer for the purpose of avoiding penalties under the Internal Revenue
Code; nor is any such advice intended to be used to support the promotion or marketing of a transaction. Any advice expressed in this article
is limited to the federal tax issues addressed in it. Additional issues may
exist outside the limited scope of any advice provided – any such advice
does not consider or provide a conclusion with respect to any additional
issues. Taxpayers contemplating undertaking a transaction should seek
advice based on their particular circumstances.
This editorial material is for informational purposes only and should not
be construed otherwise. Advice and interpretation regarding property
compliance or any other material covered in this article can only be obtained from your tax advisor. For further information visit www.novoco.
com.
Robert S. Thesman, CPA
James R. Kroger, CPA
Owen P. Gray, CPA
Thomas Boccia, CPA
Daniel J. Smith, CPA
ASSIGNMENT EDITOR
Jennifer Dockery
STAFF WRITER
Jennifer Hill
CONTRIBUTING WRITERS
Tom Boccia
Brandi Day
Brad Elphick
Jason Evans
Tony Grappone
A. Ann Hered
Thane R. Hodson
Neil D. Kimmelfield
Chris Kolerok
Peter Lawrence
John Leith-Tetrault
Forrest David Milder
Amanda M. Peterson
John Sciarretti
Amanda Talbot
John Tess
Stephen Tracy
PRODUCTION
Jesse Barredo
James Matuszak
Novogradac Journal of Tax Credits
Information
Address all correspondence and
editorial submissions to:
Alex Ruiz/ 415.356.8088
www.novoco.com
Address inquiries regarding
advertising opportunities to:
Emil Bagalso / 415.356.8037
Editorial material in this publication is for informational
purposes only and should not be construed otherwise.
Advice and interpretation regarding the low-income
housing tax credit or any other material covered in this
publication can only be obtained from your tax advisor.

May 2011
2
© Novogradac & Company LLP
2011 All rights reserved.
ISSN 2152-646X
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