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Guide for Completing Form 8823 - page 56 / 197

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*Households residing in 100% LIHC projects, where a household’s current income is not known, can also transfer between buildings within the project.

Example 2: Household in 100% LIHC Project Transfers Between Buildings

On August 15, 2008, an income-qualified household moved into a low- income unit. The unit was part of a 100% LIHC multi-building project as identified by the owner on Form 8609, line 8b. The household was not required to complete annual income recertifications and, therefore, the household’s current income was not known when, on January 15, 2010, the household requested a transfer to a low-income unit in another building within the project.

The household may transfer to a low-income unit in another building within the project even though the household’s income is not known.*

Income Certifications Where Owner Acquires or Rehabilitates Existing Building

Income Qualifying Households Before the

Beginning of the 10-Year Credit Period

Under Rev. Proc. 2003-82, a unit occupied before the beginning of the credit period will be considered a low-income unit at the beginning of the credit period, even if the household’s income exceeds the income limit at the beginning of the first year of the credit period, if two conditions related to income qualifications are met, and the unit must

is rent restricted.38

For households occupying a unit at the time of acquisition39 by the owner, the initial tenant income certification is completed within 120 days after40 the date of acquisition using the income limits in effect on the day of acquisition. The effective date of the tenant income certification is the date of acquisition since there is no move-in date.

In the event that the household occupies a unit at the time of acquisition, but the tenant income certification is completed more than 120 after the date of acquisition, the household is treated as a new move-in. Owners use the income limits in effect at the time of the tenant income certification and the effective date is the date the last adult member of the household signed the certification, (this is an exception to the general rule for effective dates because there is no move-in date).

When the household moves into a unit after the building is acquired but before the beginning of the first year of the compliance period, the tenant income certification is completed using the income limits in effect at the time of the certification and the effective date is the date the household moves into the unit.

38 Rev. Proc. 2003-82, 2003-2 C.B. 1097, provides a safe harbor under which, if certain conditions are met, a residential rental unit in an existing building acquired by a new owner or in rehabilitated building will be treated as a low-income unit even though the occupants’ incomes exceed the income limit at the beginning of the building’s 10-year credit period. In order to qualify, the household must have been income-qualified at the time the owner acquired the building or the date the household started occupying the unit, whichever is later. The owner must maintain documentation of the income qualification and the unit must be rent restricted. See chapter 10 for further discussion of the requirement for units to be rent-restricted.

39 40 The date of acquisition is the date the building is acquired by purchase under IRC §179(d)(2). *Alternatively, if the new owner has access to the property before the acquisition date, tenant income certifications may be completed before the acquisition using the current income limits. The effective date is the date of acquisition.*

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Revised October 2009

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