Save a building, save on taxes.
The Tax Reform Act of 1976 allowed accelerated depreciation on rehabilitated buildings. Over the following 10 years, changes to the tax law made the program even more attractive. The current rules allow a general business credit equal to 20% of qualified rehabilitation expenses (QRE) for certified historic structures and 10% for nonhistoric, nonresidential buildings constructed before 1936. The park service reviews and approves all projects eligible for the credit.
According to the report, within the last five years, 2,967 historic buildings were rehabilitated--among them, Chicago office towers, Baltimore row houses, St. Louis warehouses, Mississippi "shotgun" houses and Miami art deco hotels. The park service noted the tax credit "leverages private investment in depressed neighborhoods, creates jobs, promotes community preservation, fosters heritage education, enhances state and local tax revenues, and increases property values."
Currently, more than one million buildings are listed on the National Register of Historic Places. Each year more than 30,000 buildings are added to the list, of which 20% are eligible for the tax credit. According to the park service, these projects bring economic benefits of more than $4.76 billion, most of which is invested in older urban residential neighborhoods and commercial districts. In addition, each rehabilitation project creates an average of 45 new jobs.
The states that have been the most active in historic preservation over the past five years are New York, Pennsylvania and Louisiana: More than $1.3 billion has been invested in 491 projects.
Additional information about the historic preservation tax incentives program can be found on the National Park Service's Web site, http://cr.nps. gov, by clicking on Find Grants and Assistance.
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|Title Annotation:||federal tax incentives for rehabilitating historic buildings|
|Publication:||Journal of Accountancy|
|Date:||Sep 1, 2001|
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