Historic Preservation Tax Credits
The Federal Historic Rehabilitation Credit provides a 20% income tax credit for the rehabilitation of certified historic structures. This credit is available for income-producing properties listed on the National Register of Historic Places or certified as contributing to the significance of a registered historic district.
National Park Service Certification Process
Before you begin a rehabilitation project, the building must be deemed a certified historic structure by the National Park Service. This can be done by completing the Historic Preservation Certification Form 10-168 Part 1 – Evaluation of Significance.
If the building was already in service prior to part 1 submission, you may be eligible to request relief.
Protecting Historic Properties & Offering Tax Benefits
The National Park Service has a list of requirements a historic building rehabilitation project must meet:
- The building must be listed in the National Register of Historic Places or part of a registered historic district
- Meet the substantial rehabilitation test - Using the adjusted basis formula ( A — B — C + D = adjusted basis), the cost of rehabilitation must exceed the pre-rehabilitation cost of the building within two years or within five years if the project is completed in multiple phases
- The rehabilitation project must be done according to the Secretary of the Interior's Standards for Rehabilitation
- The historic building must be depreciable for at least five years and cannot be an owner-occupied residential property
The Prevailing Wage & Apprenticeship Requirements
There are additional eligibility requirements and nuances that may apply depending on your project’s specific circumstances. Our team can help you navigate these complexities and determine if your property qualifies for the Historic Preservation Tax Credit. We can also assist with the certification process with the National Park Service and the calculation of the credit.
What We Promise:
Over 600 national and regional CPA firms trust MSC’s expertise to help navigate the complexities of cost segregation studies. We are fully committed to our clients’ success—providing partner-level guidance, in-depth audit support, and exceptional service throughout every phase of a project.
- Experience and Credentials: MSC has a proven 30-year track record, with engineering and tax expertise, and experience across various property types and industries.
- Audit Support: MSC stands behind their work and takes great pride in the quality they deliver. All MSC engagements include complimentary lifetime audit support.
- Comprehensive Analysis: MSC performs site visits and deliver thorough reports that go beyond just software-generated results.
- Integration with Tax Strategy: MSC collaborates with your CPA or tax advisor to align the study with your broader tax planning goals, including step-ups, 1031 exchanges, and repairs vs. capitalization considerations.
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