Real Estate Rehabilitation Projects and the Investment Tax Credit

by Royce E. Chaffin and David F. Mullis

This article reveals that Congress appears to have substantially achieved the goal of reducing rehabilitation credits as a tax shelter for high-income taxpayers, albeit at a cost of having a much smaller pool of  individuals who are both interested in investing in rehabilitation projects and financially able to do so. While the investor at lower income levels benefits from the rehabilitation tax credits and the exemption from passive losses, this benefit decreases as income levels increase.

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