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Guide for Completing Form 8823 - page 163 / 197

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163 / 197

2. The utility rates used to compute the estimates must be the rates in place 60 days prior to the date the utility allowance will change.

Estimates Provided by State Agency’s Agent or Private Contractor

A state agency may use an agent or other private contractor to calculate the utility estimates. The agent or contractor must be a properly licensed engineer or a qualified professional. A qualified professional must be (1) approved by the state/local housing credit agency having jurisdiction over the building, and (2) must not be related to the building owner within the meaning of IRC §§ 267(b)7 or 707(b)8.

*HUD Utility Schedule Model - Taxable Years Beginning After July 28, 2009*

*Under Treas. Reg. §1.42-10(b)(4)(ii)(D)9, a building owner may calculate a utility allowance using the “HUD Utility Schedule Model” that can be found on HUD’s Internet site, the Low-Income Housing Tax Credits page at www.huduser.org/datasets/lihtc.html or successor URL.

Utility rates used for the HUD Utility Schedule Model must be no older that the rates in place 60 days prior to the date the utility allowance will change.

The utility allowance is deemed “obtained” based on the date entered as the “Form Date” on the “Location” spreadsheet of the Utility Schedule Model. This date will also be reflected on the Form 52667, Allowances for Tenant-Furnished Utilities and Other Services. This date begins the 90-day period after which the new utility allowance must be used to compute gross rents.*

*Energy Consumption Model - Taxable Years Beginning After July 28, 2009*

*Under Treas. Reg. §1.42-10(b)(4)(ii)(E)10, a building owner may calculate a utility allowance using an energy and water and sewage consumption analysis model (energy consumption model).

Factors to Consider

The energy consumption model must, at a minimum, take into account specific factors including, but not limited to: (1) unit size, (2) building orientation, design and materials, mechanical systems, appliances, and characteristics of the building location.

Building’s Consumption Data and Utility Rates

The data used to compute the estimate is limited to the building’s consumption data for a 12-month period ending no earlier than 60 days prior to the date the utility allowance will change. For newly constructed or renovated buildings with less than 12 months of consumption data, consumption data for the 12-month period for similarly sized and constructed units in the geographical area in which the building is located will be used.

The utility rates used for the energy consumption model must be the rates in place 60 days prior to the date the utility allowance will change.

7 8 9 10

*See note 1 at the end of the chapter.* *See note 2 at the end of the chapter.* *As amended by TD 9420.* *As amended by TD 9420.*

18-5

Revised October 2009

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