In an effort to protect heritage sites and other history, the IRS implemented its rehabilitation tax credit, which offers an incentive to renovate and restore old or historic buildings. Here are some of the highlights to help you determine whether your building is eligible:
- The credit may pay for 20% of the qualifying costs of rehabilitating a historic building.
- This 20% needs to be spread out over five years.
- The credit doesn’t apply to the purchase of the building.
- Taxpayers use Form 3468, Investment Credit, to claim the rehabilitation tax credit.
Although this credit might not move the needle a significant amount in a lot of situations, it’s still a step in the right direction in trying to preserve our country’s history.
* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
- IRS.gov, January 22, 2021