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Possible Solution to Mitigate Federal Tax Liability

As Americans continue planning and strategizing for their 2023 taxes, very few realize that subscribing to federal tax credits can be a great solution to reduce their federal tax liability. The Federal Historic Tax Credit program, jointly administered by the National Park Service and IRS, has been a longstanding incentive for individual investors and corporations to invest in the rehabilitation of historic buildings. This legislation has been in place for over 40 years and results in revitalized communities, enhanced property values, local jobs, and the creation of a “sense of place” that has become such an important factor in deciding where we live, work, and play. The result is a win for everyone in the project community and the investor.

Tax Credit Marketplace (“TCM”) identifies and underwrites potential qualifying projects. TCM takes the initial steps to invest in the project and gain access to the tax credits. TCM then helps investors navigate the entire process, from consulting with investors and their tax advisors to managing the investments over the hold period. The investor’s contribution to the project is made during the first two years of the investment, but the benefits extend over five years.

The investor’s contribution to the project is substantially less than the face value of the federal credits. The net effect is the investor pays their federal taxes at a substantial discount for the next five years. The qualifying projects produce an annual distribution based on the investor’s capital contribution. The investor is paid to exit the project after all the credits are realized. The net result of these collective benefits is an attractive rate of return.

The ideal federal credit investors include individuals with significant passive income, real estate professionals with active income, widely held C-corporations, banks, and insurance companies. Accreditation is required for all investors.

For more information on the potential benefits for investors, project benefits and characteristics, and the current federal tax credit landscape, please contact Andrew Porio (864.679.4719) or Josh Workman (864.679.4706).