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Case Studies

The following case studies provide real-life examples of successful attempts at using the federal rehabiltiation tax credit to finance the rehabilitation of certified historic and non-contributing historic structures. Technical assistance was provided by the National Trust for Historic Preservation and funded by the Ford Foundation in each case.

20 percent Rehabilitation Tax Credit

  • The $1.1 million 1036-40 Light Street (pdf, 136 kb) project utilized the 20 percent rehabilitation tax credit to help convert a dilapidated property into ground-floor commercial space and three units of high-end apartments in the Federal Hill neighborhood of Baltimore. The owner engaged a unique ownership structure that enabled his partnership to double the amount of the tax credit it could redeem.

  • The historic home of Baltimore's VanDyke & Bacon Shoes (pdf, 127 kb) underwent a $14,000 facelift with significant support from the 20 percent rehabilitation tax credit. The tax credits reduced the amount of the owners' required financial commitment to 25 percent of what it would have been without the credit.

10 percent Rehabilitation Tax Credit

  • The $730,000 rehabilitation of a former commercial grocery store into Federal Hill Fitness (pdf, 141 kb), a boutique fitness center will benefit from $53,000 in tax credits. The owners were able to maximize the amount of the redeemable credit by invoking the real estate professional allowance. The result of their efforts is a high-quality amenity in the historic Federal Hill neighborhood of Baltimore.

  • Porters Coffee House (pdf, 136, kb), a congenial coffee shop in Baltimore's Washington Village/Pigtown neighborhood emerged from the $90,000 rehabilitation of a 3,300 gross square foot former dry goods building. The conversion was financed in part by the 10 percent rehabilitation credit. The owners should be able to redeem the entire amount of the $5,000 credit under either the deduction equivalent exception to the passive activity rules, the real estate professional allowance, and/or the "used in trade or business" active credit allowance.