PLR 200633001: Historic property certification application treated as timely

Plain-English summary

A property owner renovated a building in a certified historic district and put it into service before applying to the Department of the Interior for historic status certification. The owner said it had not known the certification or rehabilitation credit was available and applied after learning about them. The IRS found that the late relief standards were met and treated the certification application as timely for the rehabilitation credit regulation. The ruling addresses the filing deadline; it does not determine the building's certified status or the taxpayer's ultimate credit amount.

Ruling snapshot

• Question: Can the late historic status certification application be treated as timely for the rehabilitation credit?
• Outcome: Approved for the application deadline under the stated regulation.
• Key authorities: IRC § 47; Treas. Reg. §§ 1.48-12(d)(1), 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 200633001
Third Party Communication: None
Release Date: 8/18/2006
Date of Communication: Not Applicable
Index Number: 9100.22-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:PSI:B06
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PLR-101423-06
Date:
May 10, 2006

Re: ------------------------------------------------------------------------------------------------------------
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Taxpayers = ------------------------------------------
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Property = ----------------------------
State = ------------
A = --------------------------------------
B = ------------------ --
C = --------------- --
D = -------------------
E = --------------------------
SB/SE Official = -----------------------------

Dear ----------- --------------:

This letter responds to a letter submitted December 21, 2005, requesting an extension of time pursuant to ' 301.9100-3 of the Procedure and Administration Regulations for Taxpayer to file an application for certification of historic status with the United States Department of Interior for purposes of § 47(a)(2) of the Internal Revenue Code.

According to the information submitted, Taxpayer is the owner of Property. The Property is located in the A District, a certified historic district. On B, Taxpayer obtained and began renovating the Property. Taxpayer finished the rehabilitation and placed the
PLR-101423-06
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Property in service on C. On D, Taxpayer sent the application for certification of historic status (the “application”) to the Department of the Interior.

Taxpayer represents that it failed to file the application with the Department of the Interior prior to placing the Property in service, as required by ' 1.48-12(d)(1) of the Income Tax Regulations, because it was unaware of the need for such approval, and indeed was unaware of the availability of the rehabilitation tax credit. Upon becoming aware of the credit, the Taxpayer filed its application. The Taxpayers have not yet included the credit on any Federal income tax return.

LAW AND ANALYSIS

Section 47(a)(2) provides that the rehabilitation credit for any taxable year includes an amount equal to 20% of the qualified rehabilitation expenditures with respect to any certified historic structure.

Section 47(c)(3)(A) provides that the term "certified historic structure" means any building 1) listed in the National Register of Historic Places, or 2) located in a registered historic district and certified by the Secretary of the Interior as being of historic significance to the district.

Section 1.48-12(d)(1) provides that a building shall be considered to be a certified historic structure at the time it is placed in service if the taxpayer reasonably believes on that date the building will be determined to be a certified historic structure and has requested on or before that date a determination from the U.S. Department of the Interior that such a building is a certified historic structure within the meaning of the historic rehabilitation credit provisions, and the U.S. Department of Interior later determines that the building is a certified historic structure.

Section 301.9100-1(c) provides that the Commissioner may grant a reasonable extension of time under the rules set forth in '' 301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code, except subtitles E, G, H, and I.

Section 301.9100-1(b) provides that the term "election" includes an application for relief in respect of tax.

Sections 301.9100-2 and 301.9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make an election. Section 301.9100-2 provides automatic extensions of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of ' 301.9100-2. A request for relief under ' 301.9100-3 will be granted
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when the taxpayer provides evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.

CONCLUSIONS

Based solely on the facts and representations submitted, we conclude that the requirements of '' 301.9100-1 and 301.9100-3 have been satisfied. Accordingly, Taxpayer's application will be considered timely filed for purposes of ' 1.48-12(d)(1). A copy of this letter should be sent to the appropriate service center with a request that it be attached to Taxpayer's amended tax return for the taxable year ending E. A copy is enclosed for that purpose.

Except as specifically set forth above, we express no opinion concerning the federal income tax consequences of the facts described above under any other provisions of the Code.

We are sending a copy of this letter to the SB/SE Official.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that it may not be used or cited as precedent.

Sincerely,

Heather C. Maloy
Associate Chief Counsel
(Passthroughs and Special Industries)

Enclosures (2): copy of this letter copy for section 6110 purpose ----

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