Redeeming the Tax Credit
Question:
Does 'selling' (syndicating) the credits yield more net value than keeping the credits youself?
If your answer is yes, learn more about the Community Investment Fund and the National Trust Small Deal Fund.
Yes No
Explanation:
In instances where IRS regulations significantly limit your ability to redeem the credits yourself, it may be benificial to explore your options for selling the credits. In so doing, you partner with a for-profit fund entity which provides equity to the project in exchange for the right to the federal tax credits. Traditionally, projects generating less than $2 million to $3 million in tax credits have been excluded from selling their credits because the costs of closing the transactions outweighed the benefits.
Today, however, the marketplace has grown to where developers of projects generating as little as $100,000 in tax credits may be able to sell their tax credits, albeit at less favorable terms then those that are available to owners of larger projects. There are several funds in existence today, each focusing on projects generating different dollar amounts of tax credits.