Housing partnership received 120 days to defer a building's credit period on Form 8609

Plain-English summary

A partnership placed a low-income housing building in service in one year and intended to begin the building's ten-year credit period in the following year. Its contemporaneous records reflected that intent, but it failed to make the required Section 42(f)(1) election correctly on Form 8609. The IRS found that the partnership acted reasonably and in good faith and that relief would not prejudice the government. It granted 120 days to file an amended Form 8609 solely to check the correct box on line 10a and elect the later credit-period start. The partnership must file its tax returns, Forms 8609-A, and Schedules K-1 consistently with the corrected credit period.

Ruling snapshot

• Question: May a low-income housing partnership amend Form 8609 to elect that a building's credit period begin in the year after it was placed in service?
• Outcome: approved, with 120 days to file the amended Form 8609
• Key authorities: IRC § 42(f), (l); Treas. Reg. §§ 1.42-1(h), 301.9100-1, 301.9100-3, 301.9100-8

Full text (IRS public release)

Internal Revenue Service                                      Department of the Treasury
                                                              Washington, DC 20224

Number: 202431002                                             Third Party Communication: None
Release Date: 8/2/2024                                        Date of Communication: Not Applicable
Index Number: 9100.01-00, 42.00-00
                                                              Person To Contact:
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---------------------------------------                       Refer Reply To:
                                                              CC:PSI:B05
                                                              PLR-103272-24
In Re:                                                        Date:
------------------------------                                April 30, 2024




LEGEND:

Taxpayer         =        ------------------------------
                         -------------------------

BIN              =        ------------

Year 1           =        ------------------------------------------------------

Year 2           =        ------------------------------------------------------


Dear --------------:

       This letter responds to Taxpayer’s authorized representative’s letter dated
December 19, 2023, and subsequent correspondence, submitted on behalf of
Taxpayer, requesting an extension of time to make an election under § 42(f)(1) of the
Internal Revenue Code pursuant to § 301.9100-1 and § 301.9100-3 of the Procedure
and Administration Regulations, to file an amended Form 8609, Low-Income Housing
Credit Allocation and Certification, with respect to the election under § 42(f)(1) of the
Internal Revenue Code made for a certain building in a housing project intended to be a
low-income housing project under § 42.

       According to the information submitted and representations made, Taxpayer, a
partnership for federal income tax purposes, placed the building identified by BIN in
service in Year 1. Taxpayer intended, as reflected by contemporaneous and other
documents, to begin the credit period for the building identified by BIN in Year 2.
However, Taxpayer inadvertently failed to make a timely election under § 42(f)(1) to

PLR-103272-24                                  2

begin the credit period for the building identified by BIN in Year 2. After filing Form 8609
with the Internal Revenue Service, Taxpayer discovered the inadvertent error.

        Section 42(f)(1) defines the credit period of any building as the period of 10
taxable years beginning with the taxable year in which the building is placed in service,
or at the taxpayer’s irrevocable election, the succeeding taxable year, but in either case
only if the building is a qualified low-income building at the close of the first year of the
credit period.

       Section 301.9100-8(b) provides that the election under § 42(f)(1) generally must
be made for the taxable year in which the project is placed in service, or the succeeding
taxable year if the § 42(f)(1) election is made to defer the start of the credit period, and
must be made in the certification required to be filed pursuant to § 42(l)(1) and (2).
Section 301.9100-8(a)(4)(i) provides that the election under § 42(f)(1) is irrevocable.

       Specifically, the election under § 42(f)(1) is made pursuant to the certification
requirement of § 42(l)(1)(E), which provides that following the close of the first taxable
year in the credit period with respect to any qualified low-income building, the taxpayer
shall certify to the Secretary (at such time and in such form and in such manner as the
Secretary prescribes) such other information as the Secretary may require.

       Section 1.42-1(h) of the Income Tax Regulations provides that a completed Form
8609, Low-Income Housing Credit Allocation and Certification, must be filed by the
building owner with the IRS. The requirements for completing and filing Form 8609 are
addressed in the instructions to the form. Completion of the relevant portions of Form
8609 satisfy the certification requirement of § 42(l)(1) and (2).

       The instructions to Form 8609 provide that the building owner must make a one-
time submission of Form 8609 to the Low-Income Housing Credit (LIHC) Unit at the IRS
Philadelphia campus. The building owner must file the original of the Form 8609 with
the LIHC Unit no later than the due date (including extensions) of its first tax return with
which it is filing Form 8609-A, Annual Statement for Low-Income Housing Credit.

       Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make an
election.

       Section 301.9100-1(b) defines the term “regulatory election” as including an
election whose due date is prescribed by a regulation, revenue ruling, revenue
procedure, notice, or announcement published in the Internal Revenue Bulletin.

       Under § 301.9100-1(c), the Commissioner has discretion to grant a reasonable
extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a
regulatory election, or a statutory election (but no more than six months except in the

PLR-103272-24                                 3

case of a taxpayer who is abroad), under all subtitles of the Code except subtitles E, G,
H, and I.

       Section 301.9100-2 provides automatic extensions of time for making certain
elections. Section 301.9100-3 provides extensions of time for making elections that do
not meet the requirements of § 301.9100-2.

       Requests for relief under § 301.9100-3(a) will be granted when the taxpayer
provides evidence to establish that the taxpayer acted reasonably and in good faith, and
the grant of relief will not prejudice the interests of the government.

        In the instant case, based solely on the facts submitted and the representations
made, we conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been
met. Accordingly, Taxpayer is granted an extension of time to file an amended Form
8609 for the building identified by BIN for the sole purpose of checking the correct box
on line 10a of the form to begin the credit period for the building in Year 2. The
amended Form 8609 must be filed within 120 days from the date of this letter.
The amended Form 8609 (along with a copy of this letter) must be filed with the LIHC
Unit at the following address provided in the instructions to Form 8609:

       Department of the Treasury
       Internal Revenue Service Center
       Philadelphia, PA 19255-0549

        By making the election under § 42(f)(1) for the building identified by BIN,
Taxpayer is electing to begin the credit period for the building identified by BIN in Year

2. Accordingly, Taxpayer must file its Federal income tax returns, including the Form
8609-A and the Schedule K-1, for Year 1 and all subsequent years as is necessary to
reflect the proper amount of § 42 credits.

       No opinion is expressed or implied regarding the application of any other
provisions of the Code or regulations. Specifically, we express no opinion on whether
the building identified by BIN otherwise qualifies for the low-income housing credit under
§ 42.

       This ruling is directed only to the taxpayer who requested it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.

             The ruling contained in this letter is based on the information submitted
and representations made by Taxpayer and accompanied by a penalty of perjury
statement executed by an appropriate party. While this office has not verified any of the
material submitted in support of the request for ruling, it is subject to verification on
examination.

PLR-103272-24                                 4

          In accordance with the provisions of a Power of Attorney currently on file with
this office, a copy of this letter is being sent to Taxpayer’s authorized representatives.

                                          Sincerely,

                                          Associate Chief Counsel
                                          (Passthroughs & Special Industries)

                                           /s/ Dillon J. Taylor

                                          By: _______________________
                                              DILLON J. TAYLOR
                                              Senior Technician Reviewer, Branch 5
                                              Office of Associate Chief Counsel
                                              (Passthroughs & Special Industries)

Enclosure:
Copy for § 6110 purposes

CC:
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