Tax Credits
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Tax Credit Services Overview

Services Overview

For many businesses, tax credits are vital to the day-to-day success of the operation. For others, they are a way to turn a break-even project into a profitable venture.

But whatever the reason, accounting for - and earning - the credits you deserve takes planning, diligence, and a deep understanding of the Internal Revenue Code. Having a partner who’s “been there before” can make all the difference.

 

Low-Income Housing Tax Credit

We work with many nationally recognized, successful developers and syndicators of low-income housing, and can parlay our experience to assist you with your tax credit project.

The low-income housing industry is going through unprecedented change, and KPM will help you take full advantage of the opportunities – and overcome some of the challenges - that exist today.

Our tax professionals are well-versed in Internal Revenue Code Section 42. We can help you:

  • Prepare or review your state agency allocation application
  • Compile your tax-exempt bond application
  • Prepare financial forecasts and projections
  • Structure a transaction
  • Perform an analysis of Year 15 alternatives
  • Analyze the impact of a tax-exempt’s involvement
  • Provide a number of training programs customized to your needs

The low-income housing tax credit program (“LIHTC”) offers developers and investors a wonderful way to provide quality affordable housing, and the opportunity to earn a profit. Let’s discuss a number of capital-raising possibilities, including private and public placement of your project.

Historic Site Tax Credits

There are significant tax incentives to preserving historic properties. Administered by the National Park Service, the Federal Historic Preservation Tax Incentives program is one of the nation’s most successful and cost effective community revitalization initiatives.

The historic tax credit encourages protection of landmark properties, increases the value of the rehabilitated property, returns underutilized buildings to the tax rolls, upgrades downtown neighborhoods and often increases the amount of available housing within a community.

KPM can assist you by answering questions about the 20% federal tax credit, provide guidance on the preparation and submission of application forms, educate you about documentation requirements and prepare the necessary certifications.

New Market Tax Credits

In 2000, Congress created the New Market Tax Credit program to encourage investment in low-income communities. Qualified Community Development Entities (CDEs) apply to the CDFI Fund for an award of New Market Tax Credits; the CDE then seeks investors to make investments in the CDE.

The New Market Tax Credit program is designed to enable the CDE to use its local knowledge to decide what types of businesses to invest in or lend to with its raised funds. Investment opportunities include shopping centers, retail stores, technology companies, manufacturers and many others types of ventures.

This is a tremendous program, providing significant tax incentives to investors willing to make investments in distressed and low-income communities. Let KPM put its experience to work for you in developing, financing and accounting for a New Market Tax Credit project.

Television and Film Tax Credits

Many states have developed comprehensive tax credit programs for the production of motion pictures, television and other media. These credits equal some percentage of qualified production costs, pre-production and post-production expenses incurred in each state.

If your company has generated film tax credits (or is in the production stages of a qualified project), give us a call. We have already helped major studios and independent producers monetize their credits by introducing them to a credit placement specialist. Working together we can prepare your transfer application, communicate with state agencies, and perform the necessary assurance procedures as required by each state.

If your goal is to reduce your tax liability by purchasing credits, we can introduce you to a credit placement specialist who can maximize your purchase dollars. Most production companies do not have sufficient tax liability in the states they shoot in to take full advantage of the state tax credits. These companies sell their credits at a discount for cash, benefiting the buyer of such credits.

Energy Tax Credits

President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009. This law includes enhancement to the renewable energy tax credit (“RETC”) program.

We work with investors, developers and producers of renewable energy power and infrastructure. We can talk shop with you about energy tax credits, financing issues, deal negotiation and deal structure. The programs range from tax incentives to production incentives to grant programs. Rebate programs also exist at the state, local and utility level to promote the installation of renewable energy assets.

In light of today’s tough economy, we can educate you about pricing, guarantees and other key issues. KPM works with a number of syndication companies that specialize in energy syndication, and we would be happy to introduce you to one of our strategic partners.

KPM can work with you on tax and investment structuring, asset due diligence and various compliance requirements relating to tax and financial reporting.

Life Science Tax Credits

Many states have launched various life sciences credit programs. These incentives are intended to foster growth in each respective state’s life sciences industry, and to foster innovation by supporting research, development, manufacturing and commercialization.

These incentives are generally intended to encourage growth in companies in all stages of development. Many states place additional emphasis, however, on early–stage companies - those companies at the most critical stage in their development cycle.

There are various types of life sciences credits, including investment tax credits on qualifying purchases of equipment, user fee credits, extension period of net operating losses (“NOLs”), refundable research credits, sales tax exemptions and similar-type programs.

KPM can work with you to identify the life sciences credits that your company and project may be eligible for, design systems to both capture and optimize qualified costs and expenses, and compile the necessary documents to timely monetize credits.

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