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Taking Advantage of New Markets Tax Credits

Learn about the types of projects that may qualify for New Markets Tax Credit financing and why it is preferable to conventional options.

In low-income communities across the United States, the COVID-19 pandemic has wreaked havoc in areas already suffering from long-term unemployment and lack of economic growth. The New Markets Tax Credit, codified in Section 45D of the Internal Revenue Code, was enacted with bipartisan support in 2001 and recently extended for an additional five years under the Consolidated Appropriations Act as a way to combat job loss and encourage investment in low-income communities. This material will show how the use of the New Markets Tax Credit is especially appropriate in the current economic climate and will discuss how projects utilizing New Markets Tax Credits result in a subsidy to the borrower of approximately 20% or more.

Runtime: 88 minutes
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Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Why NMTCs Over Conventional Loans?

Which Projects Qualify? How Do Projects Qualify?

  • Section 45D and the Consolidated Appropriations Act
  • Types of Projects That Qualify
    • Sin Businesses and Farming
    • Residential Rental Property and MixedUse Developments
  • Census Tracts
    • Severely Distressed
    • Secondary Criteria
  • Targeted Populations
  • Who Are the Other Players?
    • How Does the Application Process Work?
    • How Many Entities Receive Awards?

Where Does the Rest of the Capital Stack Come From and What Is an Example of How We Structure It?

  • Various Loans
    • Source Loan
    • Leverage Loan
    • QLICI Loans
  • Structuring a New Markets Tax Credit Transaction
    • For Profits
    • Nonprofits
    • QuasiGovernmental Entities
    • Example Structure Chart
  • What Is the Compliance Period and What Happens When It Is Over?

Playing Nice With Other Types of Tax Incentives

  • USDA
  • Historic Tax Credits
  • State Tax Credits
  • Bonds
  • Energy Credits

How Can NMTCs Help in COVID-19 Affected Low-Income Communities?

  • What Are Some Groups That Historically Have Not Benefited From NMTCs?
    • Tribes
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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

MP3 Download

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • HI CLE 1.5
     
  • ME CLE 1.5
     
  • NJ CLE 1.8
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 1.8
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

OnDemand Course

This course was last revised on April 28, 2021.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Julia Fendler

Julia Fendler

Butler Snow LLP

  • Practice is focused on public finance, tax credits, governmental finance, and opportunity zones
  • Served as QALICB Counsel in closing numerous tax credit projects
  • Counsel in a New Markets Tax Credit transaction for the construction and development of a new health care clinic for a federally qualified health care center located in Fort Worth, Texas; counsel in a New Markets Tax Credit transaction for the construction and development of cancer lodge facility in Jackson, Mississippi; counsel in a New Markets Tax Credit transaction for the construction and development of a health care facility and community center located in Portland, Oregon; counsel in a New Markets Tax Credit transaction for the expansion and equipping of a soybean processing facility located in Sidon, Mississippi, which utilized Federal and Mississippi NMTCs; special counsel for the construction of a Ronald McDonald House located in Fort Worth, Texas, which utilized Federal NMTCs; counsel in a New Markets Tax Credit transaction for the acquisition, construction, and equipping of a manufacturing plant facility located in Springdale, Arkansas
  • Awarded the Tax Credits Attorney of the Year in Louisiana by Corporate International Magazine
  • Bar admissions include Louisiana and Texas; associations include Texas Young Lawyers, Texas Bar Association, Louisiana Bar Association, American Bar Association, New Markets Tax Credits Working Group, and New Orleans Bar Association
  • Author and speaker, “The New Markets Tax Credit: A powerful economic force for low-income people and communities,” Texas Bar CLE Advanced Real Estate Law, July 13, 2017
  • J.D. degree, Louisiana State University; B.A. degree in history, University of Delaware, honors program, National Society of Collegiate Scholars, Omicron Delta Kappa, Golden Key International Honor Society and Phi Alpha Theta, National History Honors Society
  • Can be contacted at 504-299-7759 or [email protected]
A. Ann Hered

A. Ann Hered

Butler Snow LLP

  • Experienced public finance attorney with a focus in New Markets Tax Credits and bonds
  • Practice areas and industry teams include public finance, tax credits, and taxation of business and governmental finance
  • Counsel to a financial institution for the renovation of historic buildings for use as hotel, commercial and residential rental properties through a combination of New Markets Tax Credits and the Gulf Opportunity Zone Bonds
  • Represented a community development entity in the structuring and negotiating of a New Markets Tax Credit loan for the renovation of an historic downtown building in Denver; represented a community development entity with the financing of a medical facility using a combination of New Markets Tax Credit and Recovery Zone Facility Bonds; represented a community development entity with a project to install solar panels on top of schools and government buildings which were paid for by a combination of New Markets Tax Credits, federal tax credits for solar energy and state rebates for alternative energy generation
  • Bar admissions include Colorado, New York, and California; associations include American Bar Association – Taxation Section
  • Co-author, “Let’s Do The Math: Tax Credits Add Up To More Benefits for Charter Schools,” The Journal of Tax Credits, May 2011 (Volume II, Issue V); author, “Investors Show Learning Curve With Tax Incentives for Schools,” Colorado Real Estate Journal, March 16, 2011; author, “Financing School Construction: The Tax Consequences of Stripping,” Municipal Finance Journal, Summer 2009 (Volume 30, Number 2)
  • J.D. degree, cum laude, Cornell University Law School; B.A. degree in economics and policy studies, Rice University
  • Can be contacted at 720-330-2351 or [email protected]
Thane R. Hodson

Thane R. Hodson

Butler Snow LLP

  • Assists clients with structuring new markets tax credits financings, including upper-tier lending arrangements, direct and indirect credit enhancement of lower-tier borrowing arrangements and unique lower-tier equity financing
  • Practice areas and industry teams include public finance, tax credits, hospital and health care finance, taxation of businesses, and governmental finance
  • Represents real estate investment trust in connection with structuring of operations, compliance with federal income tax requirements, and monetization of assets; represents real estate investment trusts in connection with a variety of secured debt financings including those involving vehicles such as REMICs
  • Served as special tax counsel to REITs in connection with a variety of complex federal income tax matters including structuring investments to comply with the various federal income tax requirements applicable to REITs
  • Assists clients with structuring new markets tax credits financings, including upper-tier lending arrangements, direct and indirect credit enhancement of lower-tier borrowing arrangements and unique lower-tier equity financing
  • Structure financings which incorporate multiple forms of subsidy, particularly using new markets tax credits and energy or rehabilitation credits
  • Prepare guidelines regarding the qualification of new markets tax credit financings for the benefit of targeted populations in addition to traditional low-income communities
  • Minimize the current tax impact and facilitate the raising of additional capital when structuring complex transactions
  • Bar admissions include Colorado, Kansas, and U.S. Tax Court; associations include the American Bar Association, Colorado Bar Association and Kansas Bar Association
  • Co-Author, “Financing School Construction: The Tax Consequences of Stripping,” Municipal Finance Journal, Vol. 30, No. 02, Summer 2009, pp.71-80(10)
  • J.D. degree, Washburn University; B.A. degree in political science, cum laude, University of Kansas, Phi Beta Kappa and Summer Field Scholar
  • Can be contacted at 720-330-2350 or [email protected]
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Product ID: 408894
Published 2021
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