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Abstract: 

In August 2012, the seminal Historic Boardwalk Hall decision created turmoil in the historic tax credit industry. Subsequent IRS activity in the wake of this decision severely curtailed the use of the federal historic tax credits. Reacting to the need for guidance, on December 30, 2013, the IRS issued a safe harbor as to when it would not challenge the partnership status of a historic-tax-credit investor. This article briefly describes the relevant requirements of the tax code as relates to the monetization of the tax credits, summarizes the Historic Boardwalk Hall case and its effect on the historic-tax-credit industry, sets forth the safe harbor requirements, and explains how they are working in practice.

Keywords: historic tax credits; IRC Sec. 47; Historic Boardwalk Hall v. Commissioner, Rev. Proc. 2014-12 safe harbor, partner status, investors

Affiliations:  1: Faegre Baker Daniels.