Historic building rehabilitation tax credits: 101

Posted on March 12, 2009 by Department of Housing and Community Development

Did you know that you could receive a credit on your income taxes if you rehabilitate a historic building?   

If your rehabilitation meets certain requirements, you could claim 20 percent of your qualified rehabilitation expenses as a credit on your federal income taxes.  And, you could claim 25 percent of your qualified rehabilitation expenses as a credit on your state income taxes.  Both the federal and state Rehabilitation Tax Credit Programs could tip the scales in favor of an affordable and profitable rehabilitation of a priceless historic downtown asset.   

Most of the buildings in your Main Street district will qualify for the programs. Buildings which are individually listed in the National Register of Historic Places and the Virginia Landmarks Register, or are certified as contributing to a historic district that is listed on these registers, are eligible for the program.  In order to claim the federal tax credit, the owner must use the building for income-producing purposes.  The state credit is available for owner-occupied, as well as income-producing, properties.

A few other considerations: there is a spending threshold, an absolute minimum expenditure, for both credits.  In order to receive the credits, all work must be performed in accordance with The Secretary of the Interior’s Standards of Rehabilitation.  The application for the credits is a three-step process that is managed through the Virginia Department of Historic Resources (DHR).  DHR provides an Open House every first Friday to assist property owners, architects and investors with the process. 

You can find out more about the credits through the National Park Service and DHR Web sites.

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Keep your books in order

Posted on March 12, 2009 by Department of Housing and Community Development

Want to be sure your small business never becomes a big business? A surefire method to ensure a lack of success is to have shoddy accounting practices.  Knowing where your money is, how much of it there is, and when you can expect more are key to proper business planning.  Without a plan, your endeavor is doomed to haphazard success, at best.

Jay Goltz, an entrepreneur and author of The Street-Smart Entrepreneur, writes on CNNMoney.com that,

These days, of course, we are not enjoying a vibrant economy. One consequence is that many entrepreneurs find themselves confronting serious issues that should have been resolved years ago. These issues often involve accounting.

He continues to describe a businessman who was counting booked orders as receivables, thus confusing the time frame at which he could expect to collect the funds.  It sounds like a very small error, but this error was threatening the health of the company, as the information for planning was incorrect.

While the article is geared for small businesses, nonprofits need to keep an eye on their books, too.  While the staff often does the actual bookeeping and completes the day to day transactions, the board of directors is legally obligated to provide sufficient oversight.  That means that the treasurer should provide monthly reports to the board.  More information regarding best practices for nonprofits can be found at Boardsource.org.

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