The following hypothetical case study illustrates how the 20% tax credit for rehabilitation a certified historic structure is calculated. While these numbers are simplified, this examples does show the potential financial benefits of the federal tax incentive program.
Acquisition of Land and Building
Direct Rehabilitation Costs
Architectural and Engineering Fees
Other Indirect Costs (Legal, Accounting)
Total Project Costs
Investment Tax Credit Calculation ($320,000 + $25,000 x 20%)
Note: The $69,000 historic rehabilitation tax credit can be spread up to 15 years forward or carried three years back on amended returns as a credit to taxes owed, Most architectural and engineering fees are eligible for tax credit purposes; most legal fees are not.
For specific questions about state or federal tax credits, please contact your State Historic Preservation Office or the National Park Service , respectively.