18 - Low-income housing credit.

§  18.  Low-income housing credit. (a) Allowance of credit. A taxpayer  subject  to  tax  under  article  nine-A,  twenty-two,   thirty-two   or  thirty-three of this chapter shall be allowed a credit against such tax,  pursuant  to  the  provisions  referenced  in  subdivision  (d)  of this  section, with respect to the ownership of eligible low-income  buildings  for  which  an eligibility statement has been issued by the commissioner  of housing and community renewal. The amount of the credit shall be  the  credit  amount  for each such building allocated by such commissioner as  provided in article two-A of the public housing law. The  credit  amount  shall be allowed for each of the ten taxable years in the credit period,  and any reduction in first-year credit as provided in subdivision two of  section  twenty-two of such law shall be allowed in the eleventh taxable  year.    (b) Credit recapture. (1) General. If,    (A) as of the close of any taxable year in the compliance period,  the  amount  of  the  qualified  basis  of  any  building with respect to the  taxpayer is less than    (B) the amount of such basis as of the close of the preceding  taxable  year,    (C)  then  the  credit  recapture  amount  must  be added back for the  taxable year.    (2) Credit recapture amount. The credit recapture amount is an  amount  equal to the sum of    (A)  the  aggregate  decrease  in  the credits allowed to the taxpayer  under this section for all prior taxable years which would have resulted  if the accelerated portion of the credit allowable  by  reason  of  this  section were not allowed for all prior taxable years with respect to the  excess  of  the amount described in subparagraph (B) of paragraph (1) of  this subdivision over the amount described in subparagraph (A)  of  such  paragraph, plus    (B)  interest  at  the  overpayment rate established under section one  thousand ninety-six of this  chapter  on  the  amount  determined  under  subparagraph  (A)  of this paragraph for each prior taxable year for the  period beginning on the due date for filing the  report  for  the  prior  taxable year involved.    (3)  Accelerated  portion  of credit. For purposes of paragraph two of  this subdivision, the accelerated portion of the credit  for  the  prior  taxable years with respect to any amount of basis is the excess of    (A)  the  aggregate  credit allowed by reason of this section (without  regard to this subdivision) for such years with respect to  such  basis,  over    (B)  the  aggregate  credit which would be allowable by reason of this  section for such years with respect  to  such  basis  if  the  aggregate  credit  which would (but for this subdivision) have been allowed for the  entire compliance period were allowable ratably over fifteen years.    (4) Special rules. For purposes of  this  subdivision,  the  rules  of  section 42 (j)(4)(B) and (C) of the internal revenue code shall apply in  determining the credit recapture amount.    (5)  Exceptions  to  recapture. Recapture under this subdivision shall  not apply to a reduction in qualified basis    (A) by reason of a casualty loss, if the commissioner, in consultation  with the commissioner of housing and community renewal, determines  that  such  loss  is  restored  by  reconstruction  or  replacement  within  a  reasonable period, or    (B) by reason of a change in floor space devoted to  low-income  units  in  a building, if such building remains an eligible low-income building  after such change, and if the commissioner,  in  consultation  with  thecommissioner  of  housing  and  community  renewal, determines that such  change is de minimis, or    (C)  by reason of error in complying with low-income eligibility tests  referred to in subdivision five of  section  twenty-one  of  the  public  housing  law, if the commissioner, in consultation with the commissioner  of housing and community renewal,  determines  that  such  error  is  de  minimis.    (6)  Recapture  by partners of a partnership. In the case of ownership  of a building or interest therein by a partnership which has thirty-five  or more partners, the provisions of section  42(j)(5)  of  the  internal  revenue  code shall apply to any recapture under this subdivision unless  the partnership elects not to have such provisions apply.    (7) (A) The credit recapture required under this subdivision will  not  apply  solely  by reason of the disposition of a building or an interest  therein if it is reasonably expected that such building will continue to  be operated  as  an  eligible  low-income  building  for  the  remaining  compliance period with respect to such building.    (B)  Statute of limitations. If a building (or an interest therein) is  disposed of during any taxable year and there is any  reduction  in  the  qualified  basis  of  such  building which results in an increase in tax  under this section for such taxable or any subsequent taxable year, then    (i) the statutory period for the assessment  of  any  deficiency  with  respect to such increase in tax will not expire before the expiration of  three  years  from  the  date  the commissioner of housing and community  renewal is notified by the taxpayer (in such manner as the  commissioner  of  housing  and  community  renewal may prescribe) of such reduction in  qualified basis, and    (ii) such deficiency may be assessed before  the  expiration  of  such  three-year  period  notwithstanding  the  provisions of any other law or  rule of law which would otherwise prevent such assessment.    (c) Construction with public housing law; definitions. The  provisions  of this section shall be construed in conjunction with the provisions of  article two-A of the public housing law. For definitions relating to the  low-income housing credit, see section twenty-one of such law.    (d)  Cross-references.  For  application of the credit provided for in  this section, see the following provisions of this chapter:    (1) Article 9-A: Section 210: subdivision 30,    (2) Article 22: Section 606: subsections (i) and (x),    (3) Article 32: Section 1456: subsection (l),    (4) Article 33: Section 1511: subdivision (n).