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Technical and Accounting Updates

Fall 2013

Yield Method Accounting for More LIHTC Properties

CohnReznick has previously advised our clients that accounting for federal low-income housing tax credit (LIHTC) properties might become a little less convoluted. This is due to potential changes being considered by the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB). The proposed changes would allow more LIHTC investors to use the effective yield method, or a similar method, in their accounting for investments. Today, most LIHTC investors use the equity method in their accounting which can make investments that are performing as expected appear to be losing money. FASB staff has received comments on the proposed accounting standards update and presented suggested changes to the proposal to the EITF Task Force on Sept. 13, 2013. Click here for the full CohnReznick update.

IRS Releases Final Repair Regulations

The IRS released final regulations on September 13, 2013, providing guidance on the instances when costs for acquiring, maintaining, repairing, and replacing tangible property must be capitalized or deducted. These final regulations, colloquially known as the “repair” regulations, keep the basic structure and requirements set forth in the temporary regulations from December 13, 2011. However, the final regulations do include some changes. Click here for the full CohnReznick update.

HUD Eases Reporting Requirements for Small Owners

In its Notice H 2013-23, the Department of Housing and Urban Development (HUD) relieved owners of small multifamily projects of the burden and cost of submitting audited annual financial statements. Beginning at the end of the year, small owners of multifamily properties will be permitted to submit an Owner Certified financial statement if they receive less than $500,000 in combined federal financial assistance.

California Considers New Equity for Special Needs

California Assembly Bill 952, recently signed into law, makes it easier for California officials to combine state and federal LIHTCs to fund the development of housing for special needs residents in difficult to develop areas and qualified census tracts.


For more information, please contact your CohnReznick professional or visit the Affordable Housing Industry Practice webpage.

This article was distributed as part of the Fall 2013 Affordable Housing News and Views newsletter.

Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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