In an effort to protect heritage sites and other history, the IRS implemented their rehabilitation tax credit. This credit offers an incentive to renovate and restore old or historic buildings. Here are some of the highlights to help you determine if 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 5 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 for a lot of situations, it’s still a step in the right direction in trying to preserve our country’s history. These historic buildings are beautiful, and with a little care, they can be restored to their former glory. Whether your office is in a historic building or you just enjoy learning about your area’s past, this tax credit helps give significance to this nostalgia.
* 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.gov