NCHM staff recently reached out to IRS officials for guidance on how the agency will handle the Housing Opportunities Through Modernization Act (HOTMA) Final Rule provisions recently issued by HUD with respect to their impact on the Low-Income Housing Tax Credit (LIHTC) program. We were advised that the IRS intends to follow the HOTMA final rule regarding determining income and assets.

Many have wondered if the LIHTC program will follow HUD’s lead on asset limitations as set forth for Section 8 PBRA under the HOTMA final rule. There is no indication that the LIHTC program will implement asset limitations.

The IRS considers the HOTMA final rule to supersede Rev Proc 94-65 and will allow for self-certification of assets when the net cash value does not exceed $50,000.

Additionally, we learned that a draft of the revised Guide for Completing Form 8823 has been submitted for review, and publication is expected to be available for use by the end of the calendar year 2024. This is encouraging news since the Guide was last revised in 2011, and changes to much of the underlying authority have occurred, rendering some sections outdated and obsolete.

NCHM urges Owner/Agents to prepare now for the implementation ramp-up that will begin with the HOTMA effective date of January 1, 2024, and continue until the full compliance deadline of January 1, 2025.

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