Spring 2014, Vol. 39, No. 1

Abstract: The historic rehabilitation tax credit (HTC) market was all but frozen by the highly controversial Historic Boardwalk Hall, LLC, v. Commissioner (HBH) court decision of August 2012. Then last December, the HTC market was given new life by the Internal Revenue Service’s highly anticipated issuance of Revenue Procedure 2014-12. This article summarizes the HTC, describes typical investment structures before HBH, recounts the court case and its impact on those structures, and analyzes the practical implications of the Revenue Procedure. While the HTC industry is still adjusting to the new HTC landscape, the authors suggest that investors and principals should be able to craft arrangements that, though not free from risk for developers or investors, have far more tax certainty for both sides than was the case immediately after HBH. For that reason they anticipate the Revenue Procedure will bring old as well as new investors into the HTC market.