How The IRS Calculates 4% and 9% Low Income Housing Tax Credits [LIHTC]

In this video, I walk you through how the IRS calculates the 4% and 9% rates for LIHTCs or Low Income Housing Tax Credits.
To get straight to the point, tax credits are purchased in exchange for the ability to utilize them over a 10-year period. The IRS backs into what the annual tax credits should be by applying a discount rate to the 10 years of tax credits so that the present value of the tax credits equals 30% of the eligible basis for 4% credits or 70% of the eligible basis for the 9% credits.
In this video we cover how the IRS goes through this process.
This is more of a Deep Dive as I don’t believe there is any use for this in the professional world other than to have some context about how these numbers are derived. But I thought it was interesting enough to share.
The original post on how to calculate LIHTCs is here:
• How To Calculate Low I...
You can also check out the post on our website Adventures In CRE (www.AdventuresInCRE.com) by clinking on the link below: www.AdventuresInCRE.com/LIHTC

[@ZoeyTangCRE]

Short and sweet, thanks!

[@jasonzisser6441]

This is huge help, thanks! One caveat though, I believe later in 2020 that the 4% credit was fixed similar to the 9% credit. If so, I'd add an update.

[@pv0315]

Now this video makes great sense to me ... since i came here after listening to the ben stevens episode. Thanks a lot Michael. 🙏

[@erendiraramirez962]

HI I would like to know where , and what is the name for the Multyfamily subsidized tax credite rate percentage. For low income housing. The landlord unlawfully raised 10% percent on 2017 and 2018. We live in LA County. To my undersstanding we had to pay 3% percent until 2018. Can you tell em where can I get this information. Thank you

[@angelrosario9957]

great video

[@AR-gl6zo]

How do I know if I make too much for this? I'm worried I'm not eligible for housing anymore because we are a family of 5 making 61440 a year

[@LARGERTHANLIFE21]

Look up the AMI( average medium income) for your city on google that should take you to the local housing webpage which should show you a chart and a minimum income requirements