Experience w/ Historic Certification/20% Rehab Credit

[Nick P.]

Does anyone have any experience in getting a structure certified as a historic structure?  I am about to be under contract on an apartment building that meets the requirements to become certified assuming I rehab it correctly.  I would be interested in learning from someone about there experience actually going through the process.  Once you are certified, I've read about the strictness that you may fall under and experiences with that. 

It looks like you can carry that tax credit forward indefinitely as well? 

Overall is the whole process worth the extra 10% over the non historic credit?

[Aaron Ringel]

You need to apply to get the structure certified through your state's historic preservation office. If it's not on the National Register, and it's not a contributing part of a registered district, it will need to be accepted for inclusion by the National Park Service. When you restore it, the work plan has to be approved by the NPS and you have to spend more than your adjusted basis in the property on the restoration work. You have to follow the Secretary of the Interior's guidelines in performing the work. It has to pass inspection upon completion, and they can audit the site for up to five years after completion. 

There is no 10% credit anymore. The 20% credit is spread evenly over five years. There is also a Colorado tax credit up to 30%. The state cap is $10 million in credits per year, and it is available on a first-come, first-serve basis.

I suggest you take the time to do some research on the credit capture process at the federal and state levels, get familiar with some of your points of contact at those agencies to find out from them how to maximize your chances of success, and get a warm coat. The Colorado applications are timestamped and if I were you, I'd be standing outside their office at six in the morning on January 2nd with a federally approved plan in hand.