IRS Issues Rev. Proc Regarding Elimination of Recapture Bond Provision

Earlier today, the IRS released Revenue Procedure 2008-60 (attached) providing guidance on recently enacted legislation which repealed the recapture bond provision previously found in Section 42 of the Code.

Prior to July 30, 2008, participants in the Housing Credit program could dispose of their interests in a property provided it was reasonably expected to remain a qualified low-income property for the remaining compliance period and the taxpayer posted a bond to the Department of Treasury to offset potential future recapture.  As part of the Housing & Economic Recovery Act of 2008 (Public Law 110-289) this recapture bond provision was repealed and applies retroactively to taxpayers who disposed of their interest in Housing Credit properties who elect to have the provisions of the new law apply to them.

Instructions for taxpayers wishing to make such an election are found in Section 4 of the Revenue Procedure.

If you have questions concerning this revenue procedure or other provisions found in the Housing and Economic Recovery Act of 2008 please contact Coalition legal counsel Richard S. Goldstein (202-585-8000 or rgoldstein@nixonpeabody.com) or Coalition legislative counsel James F. Miller (202-282-5724 or jfmiller@winston.com).