Leveraging New Markets Tax Credits to Finance Community Development: Latest Regs, Guidance and Legal Developments

Twinning With Historic Tax Credits, Allocating COD Income to Partners, Using EB-5 Funds and More

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Tuesday, October 17, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide counsel with an overview of the New Market Tax Credit (NMTC) program and IRS regulations and guidance. The panel will discuss best practices for structuring NMTC deals, twinning with historic tax credits (HTCs) and other tax credit programs, allocating COD income among partners, and using EB-5 funds in the NMTC structure.

Description

The NMTC program presents significant opportunities for investors in economic development projects to secure additional financing to complete projects in low-income areas. The PATH Act extended the program through 2019. For 2017 the Community Development Financial Institutions (CDFI) Fund has announced $7 billion in allocations available for the NMTC program, and additional allocations are expected to be announced by year end.

NMTCs can offer a critical source of financing for a variety of qualified equity investments (QEIs), including mixed use affordable housing, charter schools, historic preservation projects, manufacturing, food and beverage processing, federally qualified health centers, and renewable energy projects. These tax credits are subject to recapture during the seven-year credit period if a QEI fails to satisfy certain investment and qualified business requirements.

Counsel must understand the recapture triggers, the impact of the IRS safe harbor for HTCs and current regulations relating “qualified active low-income community businesses” and “qualified low-income community investments”, true debt issues, lease vs. ownership issues, economic substance doctrine, and cancellation of indebtedness planning when negotiating new transactions, evaluating existing deals or twinning NMTCs with other tax credit programs.

Listen as our authoritative panel discusses best practices for structuring NMTC deals, twinning with HTCs, renewable energy ITCs or PTCs, employing EB-5 funds, coordinating with USDA/SBA lending and allocating COD income among partners. The panel will also discuss trends in the NMTC program, IRS regulations and guidance, and legislative developments under the new administration.

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Outline

  1. Structuring an NMTC deal
  2. Historic tax credit safe harbor
    Qualification issues/deal readiness/tax opinion issues
  3. Using EB-5 funds in the NMTC structure
  4. Allocation of costs in an unwind
  5. Drafting operating agreements to cover allocation of COD income among partners
  6. Restructurings/workouts during the seven-year compliance period; recapture risk
  7. Legislative developments

Benefits

The panel will review these and other key issues:

  • What are best practices for structuring NMTC deals to ensure compliance with IRS program requirements?
  • What roles can nonprofit 501(c)(3) organizations play in NMTC deals, and what issues should they consider before entering into these transactions?
  • What is the potential impact on the use of NMTCs of the IRS safe harbor for partnerships claiming rehabilitation tax credits?
  • How are NMTC deals impacted by cancellation of indebtedness?

Faculty

Lang, James
James O. Lang

Shareholder
Greenberg Traurig

Mr. Lang focuses his tax and corporate project finance practice on tax credit incentive programs and related state and...  |  Read More

Minor, C. Randall
C. Randall Minor

Shareholder
Maynard Cooper & Gale

Mr. Minor is Co-Chair of the firm's Banking and Finance Practice. He focuses on the representation of governmental...  |  Read More

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48 hours after event

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