WASHINGTON, D.C. – September 4, 2013 – (RealEstateRama) — This Insights report describes the New Markets Tax Credit (NMTC) Program and the major considerations banks may need to address when using the tax credits to support community and economic development activities. The report examines the primary opportunities and risks associated with the use of NMTCs and discusses the methods used by national banks and federal savings associations (collectively, banks) to structure transactions and use the credits effectively. The report addresses banks’ participation in the NMTC Program as investors, as recipients of the tax credits (allocatees), and as leverage lenders.
The information in this report was obtained from a variety of sources, including banks, nonsupervised financial intermediaries, investment fund advisers, and others that actively use NMTCs to finance a diverse range of activities. This information represents our understanding of federal income tax laws and regulations but does not constitute tax advice. Banks should consult their tax advisers about the tax treatments described in this report and the consequences that may apply to their own transactions.
Project summaries of several NMTC transactions are included in a case study in appendix A. Appendix B presents a glossary of terms about the NMTC Program. The resource directory in appendix C contains sources of additional information on the program.
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