Historic Tax Credit Overview--ref Oklahoma

1. Preservation TaxPreservation Tax
Incentives forIncentives for
Historic BuildingsHistoric Buildings
Christopher C. FieldsChristopher C. Fields
Benchmark Community DevelopmentBenchmark Community Development
(405) 625-1793(405) 625-1793
Christopher_Fields@yahoo.comChristopher_Fields@yahoo.com

2. Preservation TaxPreservation Tax
IncentivesIncentives
 Created in 1976, Revised by Tax Reform Act of
1986
 20% Tax Credit for Certified Rehabilitation of
certified historic structures
 10% Tax Credit for rehabilitation of non-historic
non-residential building built before 1936
 Both Credits must meet a substantial
rehabilitation test and involve a depreciable
building

3. Oklahoma FactoidsOklahoma Factoids
 Only 30% of the buildings rehabilitated
were ON the National Register BEFORE
participating in the tax credit program.
 65% of Oklahoma’s tax credit rehabilitation
projects have been for buildings located in
National Register historic districts.

4. Definition of Key TermsDefinition of Key Terms
 Tax Credit
 lowering of the tax owed ($ for $)
 Historic Structure
 a building that is listed individually in the National Register of
Historic Places
 a building that is located in a registered historic district and
certified by the National Park Service as contributing to the
historic significance of that district.
 Certified Historic Rehabilitation
 a rehabilitation of a certified historic structure that is approved by
the National Park Service as being consistent with the historic
character of the property and, where applicable, the district in
which it is located

5. Definition of Key TermsDefinition of Key Terms
 Substantial Rehabilitation
During a 24 month period of time, selected by the taxpayer,
rehabilitation expenditures must exceed the greater of:
 $5,000.00 OR the adjusted basis of the building and
its structural components
(purchase price, minus cost of land, plus improvements already
made, minus depreciation already taken)
 Once the substantial test is met, all qualified
expenditures, including those incurred outside of the
measuring period, qualify for the credit.

6. GovernanceGovernance
SHPO
(State Historic Preservation Office)
NPS
(National Park Service) IRS
First Point of Contact,
Provides Forms & Program
Info, Technical Assistance
Reviews all applications
for conformance to
Secretary of Interior’s
Standards
Publishes Rules,
Regulations and
Procedures for 20% & 10%
Tax Credit
Maintains National Historic
Districts & Buildings for
State
Issues all Certification
Decisions
Answers Inquiries re:
Legal & Financial aspects
of programs
Makes Certification
Recommendations to NPS
Develops and Publishes
program regulations,
standards, applications and
related information
Ensures only those eligible
for the Tax Credits utilize
them

7. Sample ProjectSample Project
 Built in 1928  Façade renovation ’54
 Former Auto Dealership  In Historic District
 Certified as Historic Structure  Needs minor external restoration
 Owner intends to sell property post rehabilitation

8. Application ProgressionApplication Progression
 Seek advice BEFORE you begin work—plan with SHPO, Architect, Tax Pros
 Photograph, Photograph, Photograph
 Ongoing Communication—beware of change orders!
 Only a completed project that meets the Standards of Rehabilitation is
approved as a “Certified Rehabilitation”
 Submission of Part 3 Triggers Tax Credits

9. HPC Application OverviewHPC Application Overview
HPCA Part 1
Evaluation of
Significance
HPCA Part 2
Description of
Rehabilitation
HPCA Part 3
Evaluation of
Significance
 Documents the
physical appearance
of the building
States the
Significance of the
building
 Building and
rehabilitation project
data gathered
Records anticipated
costs of project
Itemized
documentation of
proposed project
Document Final Costs
Owner attests the
completed project
conforms to “approved”
HPCA Part 2

10. Requirements Standards &Requirements Standards &
FeesFees
NPS Processing Fees
 If Total Renovation is under
$20,000 there is no fee
Preliminary Fee of $250
assessed before Review of
HPCA Part 2
Final Fee assessed before
review of HPCA Part 3, Fee
Schedule based on total
rehabilitation, less Preliminary
Fee
IRS Requirements
 Building must be depreciable, used
in trade
Rehabilitation must be substantial
Property must be placed in service
Must be Historic Structure at time
placed in service, HPCA Part 1 must
be filed prior to placing in service
Costs must be Qualified
Rehabilitation Expenditures

11. Requirements Standards &Requirements Standards &
FeesFees
Secretary of Interior’s Standards for Rehabilitation
 Certified Rehabilitation projects must meet the standards as
interpreted by NPS
 Standards are applied in a reasonable manner with the
consideration of economic and technical feasibility
 Apply to all historic building of all types
 Apply to interior and exterior
 Encompass related landscape features, site, and environment
 Encompass attached, adjacent, and related new construction

12. Thank You!Thank You!
Christopher C. Fields
Benchmark Community Development
(405) 625-1793
Christopher_Fields@yahoo.com