Form 8823 (Rev. 9-2015)
Page 3
year of the credit period. For buildings placed in service
after July 30, 2008, report any obligation the interest on
which is exempt from tax under section 103 that is or was
used (directly or indirectly) with respect to the building or
its operation during the compliance period and that was
not taken into account when determining eligible basis at
the close of the first year of the credit period.
Item 11f. Failure to satisfy the minimum set-aside
requirement for the first year of the credit period results in
the permanent loss of the entire credit.
Failure to maintain the minimum set-aside requirement
for any year after the first year of the credit period results
in recapture of previously claimed credit and no
allowable credit for that tax year. No low-income housing
credit is allowable until the minimum set-aside is restored
for a subsequent tax year.
Item 11h. All units in the building must be for use by
the general public (as defined in Regulations section
1.42-9 and further clarified in section 42(g)(9)),
including the requirement that no finding of
discrimination under the Fair Housing Act occurred for
the building. Low-income housing credit properties are
subject to Title VIII of the Civil Rights Act of 1968, also
known as the Fair Housing Act. The Act prohibits
discrimination in the sale, rental, and financing of
dwellings based on race, color, religion, sex, national
origin, familial status, and disability. See 42 U.S.C.A.
sections 3601 through 3619.
It also mandates specific design and construction
requirements for multifamily housing built for first
occupancy after March 13, 1991, in order to provide
accessible housing for individuals with disabilities. The
failure of low-income housing credit properties to comply
with the requirements of the Fair Housing Act will result in
the denial of the low-income housing tax credit on a
per-unit basis.
Individuals with questions about the accessibility
requirements can obtain the Fair Housing Act Design
Manual through www.huduser.org.
Item 11i. The owner must rent to low-income tenants all
comparable units that are available or that subsequently
become available in the same building in order to
continue treating the over-income unit(s) as a low-income
unit. All units affected by a violation of the available unit
rule may not be included in qualified basis. When the
percentage of low-income units in a building again equals
the percentage of low-income units on which the credit is
based, the full availability of the credit is restored. Thus,
only check the “Noncompliance corrected” box when the
percentage of low-income units in the building equals the
percentage on which the credit is based.
Item 11k. Section 42(h)(6) requires owners of tax credit
properties to enter into an extended use agreement with
the state agency that allocated the credits to the project.
Building owners must agree to a long-term commitment
beginning on the first day of the 15-year compliance
period and ending on the later of (1) the date specified by
the state agency in the agreement or (2) the date which is
15 years after the close of the 15-year compliance
period.
The extended use agreement must (1) specify that the
applicable fraction for the building for each year in the
extended use period will not be less than the applicable
fraction specified in the extended use agreement and
prohibit the eviction or the termination of tenancy (other
than for good cause) of an existing tenant of any low-
income unit, or any increase in the gross rent with respect
to such unit not otherwise permitted under section 42, (2)
allow individuals (whether prospective, present, or former
occupants) who meet the income limitations applicable to
the building under section 42(g) the right to enforce in
state court the requirements and prohibitions under
section 42(h)(6)(B)(i) throughout the extended use period,
(3) prohibit the disposition to any person of any portion of
the building unless all of the building is disposed of to
that person, (4) prohibit the refusal to lease to section 8
voucher holders because of the status of the prospective
tenant as such a holder, and (5) provide that the
agreement is binding on all successors of the taxpayer.
The extended use agreement must be recorded as a
restrictive covenant with respect to the property under
state law.
Noncompliance should be reported if an extended use
agreement is not executed and recorded as a restrictive
covenant with respect to the property under state law or
the owner failed to correct the noncompliance within the
one-year correction period provided by section 42(h)(6)(J).
The one-year correction period begins when the agency
notifies the owner in writing that an extended use
agreement is not recorded as a restrictive covenant with
respect to the property under state law. A copy of the
notification letter should be included as an attachment to
Form 8823 when filed with the IRS.
Item 11q. Check this box for noncompliance events
other than those listed in 11a through 11p. Attach an
explanation. For projects with allocations from the
nonprofit set-aside under section 42(h)(5), report the lack
of material participation by a non-profit organization (i.e.,
regular, continuous, and substantial involvement) that the
housing credit agency learns of during the compliance
period.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the
right amount of tax.
You are not required to provide the information
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instructions must be retained as long as their contents
may become material in the administration of any Internal
Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.