Federal and State New Markets Tax Credits

Mastering the Fundamentals of NMTC Incentives Used in Various Financing Structures

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, October 10, 2012

Recorded event now available

or call 1-800-926-7926
Program Materials

This teleconference will prepare advisors and tax professionals with the tools to work effectively on business transactions financed in part with federal or state new markets tax credits.

Description

At various stages of an equity investment transaction (investor, community development entity, recipient business), tax advisors and professionals must become familiar with the income tax aspects of federal new markets tax credits and of the 14 state NMTC programs available.

Earlier in 2012, the Treasury Department approved the latest, $3.6 billion tranche of federal NMTCs, and Congress is expected to extend the program again soon. The 39%, seven-year credit rewards investment in businesses in low-income areas that is funneled through community development entities.

As NMTCs become ever more mainstream, tax specialists must master fundamentals such as potential risks (e.g., possibility of credit recapture if CDEs redeem investments too soon), the reality of federal tax on capital gains, and how "twinning" with state tax credits can boost available NMTCs.

Listen as our panel of consultants who work frequently with new markets tax credits explains the essentials of federal and state tax-related benefits and risks.

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Outline

  1. How the NMTC works
    1. Goals for and amount of the credit
    2. Parties involved in an NMTC-backed transaction
    3. Qualification tests
  2. State NMTCs available
    1. Which states have credits in place or have considered creating them
    2. Examples of some state credits, and their terms
  3. Benefits and risks with NMTCs
    1. Raising amount of federal NMTCs available
    2. Risk of recapture
    3. Capital gains issues
  4. Near-term future of NMTC program
    1. Status of renewal bills in Congress
    2. How projects in the pipeline are being affected now

Benefits

The panel will explore these and other fundamental aspects of NMTCs:

  • Qualifying community development entities, investors, developers and businesses.
  • Special federal tests for income, use of proceeds, use of property and other activities.
  • Examples of state NMTCs, and how they track or part from the federal approach.
  • How federal credits can potentially be forfeited under certain circumstances.
  • How coupling federal NMTCs with state tax credits can maximize the federal incentive.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Marc Schultz
Marc Schultz

Partner
Snell & Wilmer

He chairs the firm's Tax Credit Finance Group and co-chairs its Fund Formation and Investment, and Affordable...  |  Read More

David Taylor
David Taylor
Manager
RubinBrown

He is attached to the firm's Real Estate Services Group and works primarily on tax restructurings and financial...  |  Read More

Tom Nelson
Tom Nelson

Shareholder
Kantor Taylor Nelson Evatt & Decina

The firm specializes in real estate and economic development law, and he works often with structures combining new...  |  Read More

Carolyn Vogt
Carolyn Vogt

Shareholder
Lane Powell

She has more than 20 years of experience with complex business transactions, frequently involving tax incentives...  |  Read More

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