Academic journal article Journal of Accountancy

Save a Building, Save on Taxes

Academic journal article Journal of Accountancy

Save a Building, Save on Taxes

Article excerpt

The National Park Service, part of the U.S. Department of the Interior, has released a report, Federal Tax Incentives for Rehabilitating Historic Buildings, that summarizes the positive effects of the historic preservation program started 25 years ago.

The Tax Reform Act of 1976 allowed accelerated depreciation on rehabilitated buildings. Over the following 10 years, changes to the tax law made the program even more attractive. The current rules allow a general business credit equal to 20% of qualified rehabilitation expenses (QRE) for certified historic structures and 10% for nonhistoric, nonresidential buildings constructed before 1936. The park service reviews and approves all projects eligible for the credit.

According to the report, within the last five years, 2,967 historic buildings were rehabilitated--among them, Chicago office towers, Baltimore row houses, St. Louis warehouses, Mississippi "shotgun" houses and Miami art deco hotels. The park service noted the tax credit "leverages private investment in depressed neighborhoods, creates jobs, promotes community preservation, fosters heritage education, enhances state and local tax revenues, and increases property values. …

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