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Final regulations: Rehabilitation credit and rules coordinating with other credits (text of regulations)

Final regulations: Rehabilitation credit and rules

The IRS today posted on its website a version of final regulations (T.D. 9915) concerning the rehabilitation credit and including rules to coordinate the new five-year period over which the credit may be claimed with other special rules for investment credit property.

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The 2017 tax law (Pub. L. No. 115-97)—the legislation that is often referred to as the “Tax Cuts and Jobs Act” (TCJA)—modified the Code provisions providing a rehabilitation tax credit. Proposed regulations to implement the TCJA changes to the rehabilitation credit and to coordinate with other rules for investment credit property were released in May 2020. Read a description of the proposed regulations: TaxNewsFlash

The final regulations [PDF 123 KB] released by the IRS today include a statement that the regulations that were proposed in May 2020 are adopted “without modification.”

The version of the final regulations released today also includes the following statement:

This document has been submitted to the Office of the Federal Register (OFR) for publication and will be pending placement on public display at the OFR and publication in the Federal Register. The version of the final regulations released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.

Read a related IRS release, IR-2020-210.

Applicability rule

The preamble states that these final regulations apply to tax years beginning on or after the date when they will be published in the Federal Register; however, taxpayers may choose to apply these final regulations for qualified rehabilitation expenditures  paid or incurred after December 31, 2017, in tax years beginning before the Federal Register publication date, provided the taxpayers apply the final regulations in their entirety and in a consistent manner.

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