posted November 10, 2008
Applications are now due for $12 million in federal tax savings to be awarded to property owners who are constructing or doing major renovations to commercial, industrial, and mixed-use (retail/rental housing) buildings in select Chattanooga neighborhoods.
The buildings must be completed between January 1, 2008 and December 31, 2009.
They must be located in the Renewal Community (RC), which includes designated neighborhoods in zip codes 37402, 37403, 37404, 37405, 37406, 37407, 37408, 37409 and 37410. To determine if your building is in the RC, call Maria Noel at 423 425-3776 or go to the RC Address Locator at http://egis.hud.gov/egis/cpd/rcezec/ezec_open.htm.
Buildings can be newly constructed. If renovated, building expenses must equal or exceed the purchase price or basis of the building, whichever applies. Consult your tax advisor to determine your eligibility.
Completion of the buildings must result in the creation of permanent new jobs in Hamilton County, paying above-market wages; put abandoned buildings and vacant lots back into service; and stimulate commercial growth in the area.
Buildings can be owner-occupied or leased space; however, the tax savings will be awarded to the property owner.
The federal tax savings – or Commercial Revitalization Deductions (CRD) – allow property owners to deduct a portion of construction, renovation and other qualified building expenses over a shorter period of time than is permitted under standard IRS rules. Under standard rules, commercial building expenses are depreciated over 39 years. With a CRD, property owners can accelerate the depreciation and deduct either 100% of qualified expenses over 10 years or up to 50% of qualified expenses the year the building is placed in service (with the remainder deducted over the standard time).
For more information or to apply, contact Chattanooga's Renewal Community Office at 423 425-3776 or email noel_m@theenterprisectr.org.
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