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January 2019 Quizzle

Question One

What is NOT a part of calculating the tax credit formula?

  1. Applicable credit percentage
  2. Qualified basis
  3. Building Identification number
  4. Applicable fraction

Answer:  (C) Building Identification Number is not a part of the tax credit formula.  Step one of the tax credit formula is the eligible basis x applicable fraction = qualified basis. Step two of the tax credit formula is qualified basis x applicable credit percentage = Annual tax credit


Question Two

True or False - On the form IRS 8609, line 10c minimum set aside can be changed at any time during the compliance period.

Answer:  False.  The minimum set aside is an irrevocable selection.


Question Three

What are the two types of credit percentages for Low Income Tax Credits?

  1. 20% and 50%
  2. 4% and 9%
  3. 40% and 60%
  4. 40% and 50%

Answer:  (B)  Section 42, Internal Revenue Code includes two credits: a 4 percent credit for acquisitions and housing projects that use tax-exempt bonds, and a 9 percent credit for projects that do not use tax-exempt bonds. 


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