To be eligible for the 20% rehabilitation tax credit, a project must also meet the following basic tax requirements of the Internal Revenue Code:
– The building must be depreciable – commercial or rental.
– The property must be placed in service (i.e., returned to use). Furthermore, the owner must hold the building for five full years after completing the rehabilitation, or pay back the credit.
– The rehabilitation must be substantial, which means that during a 24-month period selected by the taxpayer, rehabilitation expenditures must exceed the greater of $5,000 or the adjusted basis of the building.
– The building must be a certified historic structure when it is placed in service.