Section 1 Short title
This Act may be cited as the “Historic Tax Credit Improvement Act of 2017”.
Historic Tax Credit Improvement Act of 2017
A BILL
To amend the Internal Revenue Code of 1986 to improve the Historic Rehabilitation Tax Credit, and for other purposes.
Sec. 2 Increase in the rehabilitation credit for certain small projects
In general— Section 47 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(e) Special rule regarding certain smaller projects
“(1) In general—In the case of any qualified rehabilitated building or portion thereof—
“(A) which is placed in service after the date of the enactment of this subsection, and
“(B) which is a smaller project,
“(2) Maximum credit—The credit determined under this subsection with respect to any smaller project for all taxable years shall not exceed $750,000.
“(3) Smaller project defined
“(A) In general—For purposes of this subsection, the term smaller project means any qualified rehabilitated building or portion thereof if—
“(i) the qualified rehabilitation expenditures taken into account for purposes of this section (or would have been so taken into account if this subsection had been in effect for all prior periods) with respect to the rehabilitation are not over $3,750,000, and
“(ii) no credit was allowed under this section for either of the 2 prior taxable years with respect to such building.
“(B) Progress expenditures—Credit allowable by reason of subsection (d) shall not be taken into account under subparagraph (A)(ii).”
Effective date— The amendment made by this section shall apply to periods after the date of the enactment of this Act, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
Sec. 3 Allowance for the transfer of credits for certain small projects
In general— Section 47(e) of the Internal Revenue Code of 1986, as amended by section 2, is amended by adding at the end the following new subsection:
“(4) Transfer of smaller project credit
“(A) In general—Subject to subparagraph (B) and such regulations or other guidance as the Secretary may provide, the taxpayer may transfer all or a portion of the credit allowable to the taxpayer under subsection (a) for a smaller project.
“(B) Certification
“(i) In general—A transfer under subparagraph (A) shall be accompanied by a certificate which includes—
“(I) the certification for the certified historic structure referred to in subsection (c)(3),
“(II) the taxpayer’s name, address, tax identification number, date of project completion, and the amount of credit being transferred,
“(III) the transferee’s name, address, tax identification number, and the amount of credit being transferred, and
“(IV) such other information as may be required by the Secretary.
“(ii) Transferability of certificate—A certificate issued under this section to a taxpayer shall be transferable to any other taxpayer, except that a certificate may not be transferred more than once.
“(C) Tax treatment relating to certificate
“(i) Disallowance of deduction—No deduction shall be allowed for the amount of consideration paid or incurred by the transferee.
“(ii) Allowance of credit—The amount of credit transferred under subparagraph (A)—
“(I) shall not be allowed to the transferor for any taxable year, and
“(II) shall be allowable to the transferee as a credit under this section for the taxable year of the transferee in which such credit is transferred.
“(D) Recapture and other special rules—The taxpayer who claims a credit under this section by reason of a transfer of an amount of credit under subparagraph (A) with respect to a smaller project shall be treated as the taxpayer with respect to the smaller project for purposes of section 50.
“(E) Information reporting—The transferor and the transferee shall each make such reports regarding the transfer of an amount of credit under paragraph (A) and containing such information as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner as may be required by the Secretary.
“(F) Regulations—The Secretary shall prescribe regulations or other guidance to carry out this paragraph.”
Effective date— The amendments made by this section shall apply to periods after the date of the enactment of this Act.
Sec. 4 Increasing the type of buildings eligible for rehabilitation
In general— Section 47(c)(1)(C)(i)(I) of the Internal Revenue Code of 1986 is amended by inserting “50 percent of” before “the adjusted basis”.
Effective date— The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.
Sec. 5 Reduction of basis adjustment for rehabilitation property
In general— Section 50(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(6) Special rule relating to the rehabilitation credit—In the case of any rehabilitation credit—
“(A) only 50 percent of such credit shall be taken into account under paragraph (1), and
“(B) only 50 percent of any recapture amount attributable to such credit shall be taken into account under paragraph (2).”
Coordination with basis adjustment— Section 50 of such Code is amended by adding at the end the following:
“(e) Coordination with basis adjustment—In applying the provisions of former section 48(d)(5)(B) pursuant to subsection (d)(5) to a lease of property eligible for the rehabilitation tax credit, the lessee of such property shall include ratably in gross income over the shortest recovery period that could be applicable under section 168 with respect to such property an amount equal to 50 percent of the amount of the credit allowable under section 38 to the lessee with respect to such property.”
Sec. 6 Modifications regarding certain tax-exempt use property
In general— Section 47(c)(2)(B)(v)(I) of the Internal Revenue Code of 1986 (relating to tax-exempt use property) is amended by inserting “and subclauses (I), (II), and (III) of section 168(h)(1)(B)(ii) shall not apply” after “thereof”.
Effective date— The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.