Novogradac & Company recently issued an alert providing and update on the eligibility of exchanging GO Zone Credits using the Tax Credit Exchange Program. The alert reports that U.S. Treasury Deputy Assistant Secretary for Tax Credits, Michael Mundaca issued a letter to Milton Bailey, President of Louisiana’s Housing Finance Agency in response to a request for clarification on developers’ ability to exchange returned GO Zone credits using the Tax Credit Exchange provision contained within the American Recovery and Reinvestment Act (ARRA). The letter states that the exchange program applies only to LIHTCs allocated under section 42(h)(3)(C) of the Internal Revenue Code. Because GO Zone credits were allocated as “additional credit cap,” states cannot return these credits for grant money.
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